sinclaire

Karma: 6

sinclaire 22 Apr 2013 11:42 UTC
1 point
in reply to: lsparrish’s comment on: Bitcoins are not digital greenbacks
Not really. There will be people who like to eat. There will be morbidly obese people who will eat until a heart attack. But there is nothing fundamental about pizza that it’s essential to the planet, the survival of the species, the sustainability of the environment, or staying happy and healthy. If it were important then people would buy more pizza, such as if pizza were shown to extend human lifespan then yes people will buy a lot of pizza. But if pizza doesn’t do that but vitamins do then people will spend Bitcoin on expensive vitamins instead of pizza but the Bitcoin will always be spent.

sinclaire 21 Apr 2013 2:49 UTC
0 points
in reply to: gwern’s comment on: Bitcoins are not digital greenbacks
a) Future abuses via Satoshi having too many Bitcoin or from a Bitcoin elite can be countered right here and right now by supporting alt-cryptocurrencies. If one government backed Bitcoin then back the alts so that that one government competes with all those other government backed alt currencies. My attitude and behavior remains unchanged regardless of who backed Bitcoin initially or who Satoshi is.

b) Backdoors should be assumed to be in Bitcoin already. If you run it on Windows and you didn’t compile it yourself then assume the NSA and FBi backdoor is already there in the code you either didn’t compile yourself or you ran on a closed source operation system which once again you didn’t compile yourself. If your behavior would be the same whether the backdoor exists or not then you’re okay, and in my case my behavior would be exactly the same whether a backdoor exists or not so I don’t fear the possibility.

c) The government crackdown possibility is real but the best way to defend against it is to actually support many cryptocurrencies knowing that some governments are possibly going to benefit from them. When enough governments stand to benefit from the technology in general, then sort of like the Internet it’s here to stay and for the same reasons.

d) Even if the government designed Bitcoin it does not control it, and it’s highly unlikely that any single government could maintain control of cryptocurrencies as a technology let alone control Bitcoin. So in a way Bitcoin is decentralized enough that no single government can dominate it but I’m sure many governments are involved at the clandestine level.

sinclaire 21 Apr 2013 2:41 UTC
1 point
in reply to: lsparrish’s comment on: Bitcoins are not digital greenbacks
I could agree with you if people were rational but they aren’t. People need incentives to do what is rational and deflation provides those incentives by rewarding the rational and punishing the irrational. You can spend in a deflationary currency but if you spend on stuff which isn’t worth it then you get to experience buyers remorse or guilt over all the money you could have saved if you had not bought that Pizza. I think that is a really good thing because it makes people give considerably more thought into their investments.

And you’re right if people are saving rather than spending it means products aren’t good enough. And most products truly aren’t good enough which is why people are sending that signal. Businesses who need capital in the Bitcoin world can get it from USD which is inflationary. There is plenty of credit and cheap USD money that angel investors can supply to Bitcoin businesses. This is why USD and Bitcoin will have to co-exist.

sinclaire 21 Apr 2013 0:11 UTC
0 points
in reply to: Kevin’s comment on: Bitcoins are not digital greenbacks
It could have been created by the UN or by multiple governments. Does it even matter just so long as the code is released, it works, and it solves problems? It wouldn’t surprise me at all if Intel agencies utilize Bitcoin nor would it surprise me if operatives helped to develop it. It does not change the utility of Bitcoin for me just because of it’s origins.

sinclaire 21 Apr 2013 0:05 UTC
−4 points
in reply to: lsparrish’s comment on: Bitcoins are not digital greenbacks
Yes I know Bitcoins are deflationary and I think that is one of the best things about Bitcoin. I think demand should always increase faster than supply if you look at it holistically. We have a world where population growth is increasing faster than job growth can ever keep up, we have a sustainability problem with pollution and waste, and we have inflationary currencies, credit, and debt contributing to diminished liberty and justice for all. Spending isn’t always a good thing when we currently spend on stuff which destroys the planet, which isn’t necessary, which doesn’t make sense, it’s growth for growth sake and it’s as bad as economic cancer.

Volatility is bad for large contracts but this can be solved technologically. There are ways to make Bitcoin less volatile for use in contracts and colored coins, Ripple and smart contracts may be a part of the solution.

I think Bitcoin is in a niche, that niche being it is the best currency for the digital space and for digital content. If you’re offering digital content then it makes much more sense to exchange that content for Bitcoin because there is no micropayment structure which makes sense in fiat currency and there is no easy way to do it which would be obviously better than Bitcoin. I’m not going to tip you with my credit card number but I might with Bitcoin.

Long term Bitcoin is probably going to be replaced by something better. It will last for 10 years, perhaps 15, but it’s dominance will mainly be in the next 5 years. How long did Netscape last? This is why it’s good to invest in alternative cryptocurrencies which promote innovative solutions. Rather than change Bitcoin’s protocol it’s important to help fuel competition for Bitcoin so we can find out from the market which alternatives are necessary. For certain niches Litecoin might be better, but for certain things Bitcoin may be best and for other things we might have other coins like PPcoin and anything which comes after it. The point is the more cryptocurrencies we have the more solutions we have and the more niche markets we fill. So if you want to encourage that then you should buy the alt-crypto currencies.

The main thing in my opinion is getting infrastructure built. I think once Bitcoin has infrastructure built then all the alt currencies will piggy back on Bitcoins infrastructure whether Bitcoin fails or is a success or falls into a niche does not matter as long as the infrastructure is built.

sinclaire 20 Apr 2013 23:38 UTC
1 point
in reply to: lsparrish’s comment on: Bitcoins are not digital greenbacks
So what you’re basically saying is that we must increase the supply of fools by offering cheap money so they can buy stuff which isn’t valuable(junk) so as to inflate the economy. I disagree if that is what you suggest.

The reason for my disagreement is because I disagree when you say people wont be willing to spend. People are willing to spend on entertainment provided they have an income. People will spend on entertainment because there is no guarantee any of us will be alive in 10 years when Bitcoins could be worth 1 million a coin or whatever high value number people are throwing around. There is also no guarantee Bitcoin will be there 10 years from now. So basically the deflationary anti spending argument is actually an argument in favor of saving.

If you think people shouldn’t save anything then you basically have another USD where everyone is living on credit, living on debt, and no one can afford to save. That is no better than what we already have honestly except perhaps it’s an Internet dollar but it maintains all the flaws of the fiat monatary system.

Investing is something I would entertain right now because its one of the few ways to spend money to make money. There is risk involved but depending on how many Bitcoins you have the incentive for taking those risks might or might not be worth it. It also depends on how many Bitcoins you invest, but to have some Bitcoins invested in Silver, in Stocks, in alternative cryptocurrencies, or in promising technologies, that is what I see going on quite a bit. I see people investing in cryptostocks, I see people buying Gold and Silver physical Bitcoins, I see people buying mining equipment like Avalon ASICS using Bitcoins. This behavior will increase in the future when the ROI becomes high enough to make more people invest.

The entertainment market will not suffer during deflation. People want comfort and happiness and will spend any amount of money to achieve it. Gaming sites, movies/music, gambling sites, cam/porn sites, etc., will all do well under Bitcoin. These all count as spending, and over time more money will be spent on these activities.

What people will spend Bitcoins on does not have to be what people spend USD on. People will spend Bitcoins on virtual or digital content, this could be e-books or access to academic journals. The only thing Bitcoin is missing is infrastructure and exclusive content which can only be bought with Bitcoin. You have both those in place and people will have to spend Bitcoin to get content and anyone can make content.

sinclaire 20 Apr 2013 22:21 UTC
3 points
in reply to: lsparrish’s comment on: Bitcoins are not digital greenbacks
Saving and investment are the solution to debt. Bitcoin encourages both saving and investing. Investing isn’t the same as mere spending because you earn profits on investing. The majority of people in the USA are in debt because of inflation, credit, loans, etc.

sinclaire 20 Apr 2013 22:12 UTC
1 point
in reply to: knb’s comment on: Bitcoins are not digital greenbacks
And speculation is popular because it’s perhaps the easiest way to make profits from Bitcoin. People don’t create money to waste money unless it’s inflationary on purpose. People tend to want to earn, save, and invest. Bitcoin allows people to earn, save, and invest, but the reason why people don’t like to spend is because it’s very hard to earn.

People do like to save, invest and speculate. The point is if I own any Bitcoins I’m not going to spend it on a Pizza which once I eat it those Bitcoins are gone forever and I can never get them back? No I’m instead going to invest my Bitcoins to either help me make more Bitcoins in the future or to protect whatever Bitcoins I already have. I would seek to increase my income in Bitcoins and decrease costs. I would seek to maximize my profits. Once I have enough income and profits that I know I’ll always have some Bitcoins to play with that is when I’ll start to spend.

The point is not to ever spend them down. It makes no rational sense to spend your life savings down, but it makes all the sense in the world to spend up or spend across. Luxury Bitcoins is not something most people have right now but that will change when the value of Bitcoins go up in relation to USD and the income sources for Bitcoins increase.

Once I can earn Bitcoins fairly easily and I know the value is over $1000 a coin it becomes a different story and at $10,000 a coin even more likely to spend. The point is people are more likely to spend also when the value of a Bitcoin in reality matches the value they have set for it in their mind. People who believe each Bitcoin is worth $100,000 aren’t going to spend until they are worth that much and this is okay because our willingness to spend is what decides how much they are worth. So maybe we shouldn’t spend them for a while.

sinclaire 20 Apr 2013 21:59 UTC
3 points
on: Bitcoins are not digital greenbacks
a) When I can earn Bitcoins I will be more likely to spend them. Dollars as inflationary but I’m not likely to spend the last dollar in my pocket on something I don’t actually need. Bitcoins are inflationary but I’m not likely to spend my last Bitcoin on something I don’t really need. It’s currently very hard to earn a significant amount of Bitcoins so no one is ready to spend them and at the same time there aren’t many places to spend them either. So while the deflation is good we need to be able to replace every Bitcoin we spent to make it spendable like a currency. When I can spend X amount a week based on an income of Y amount a week then why not spend Bitcoins in that scenario? I don’t lose any Bitcoins so there is no reason not to spend my profits. I’m not however going to spend my savings and who exactly would?

b) Volatility isn’t a problem. Bitspend and Bitpay can handle it. Better designed payment processors can handle it. Better designed exchanges can handle it. But for now volatility means increased profits for speculators and right now speculation is one of the only ways to turn 1 BTC into 2 BTC. So if that is the best source of income in the Bitcoin economy it’s going to create a natural incentive to pump and dump which drives volatility up.

c) Bitcoin does not have to replace the dollar to be a success it merely has to coexist. Alternative cryptocurrencies don’t have to replace Bitcoin but merely compete. Bitcoin is like the first web browser when no one knows how the web works but experts from other fields expect it to work like something else. Bitcoin is unique and we cannot base how it works around fiat currency, gold or anything else.