Finance and Economics > The Money Board

Why bitcoin may never get much above $5,000 again

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iam4liberty:
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FreeLancer:

--- Quote from: David in MN on March 30, 2019, 05:47:40 PM ---Never talk economics to a Bitcoiner. You'll go insane pointing out problems and they'll just tout their currency arbitrage store of value whatever's next.

You can, like me, predict the price decline and still not be in the "in crowd". Well, fuck them. I made money on the up, sold into the crazy, and now look for a purpose. But I know I can't have a sane conversation with the Bitcoiners. I called the top and got haranged for it.

Let the Bitcoin people be the Bitcoin people. Not really bright about economics and investment. And they'll throw it in your face that you missed the big spike (even if you didn't) and claim victory losing money. It's a slow group.

--- End quote ---


:wtf:

iam4liberty:

--- Quote from: FreeLancer on March 30, 2019, 05:48:32 PM ---Bitcoins are generated at a fixed rate, though. You can’t mine more into existence at a faster rate by increasing the size of the mining pool.

--- End quote ---

That depends on how you view the "supply".  The true money supply includes both the absolute number of units of the currency plus its velocity (how quickly it turns over).  In bitcoin the absolute supply increases via the mining award.  There are mechanisms to control this (though these can be gamed so rate is higher than designed rate) and it is theoretically capped at 21 million.  But the velocity is not significantly capped and the transaction fee from miners is a large factor in this.

FreeLancer:

--- Quote from: iam4liberty on March 30, 2019, 08:41:06 PM ---There are mechanisms to control this (though these can be gamed so rate is higher than designed rate) and it is theoretically capped at 21 million. 

--- End quote ---

How is it gamed?



--- Quote from: iam4liberty on March 30, 2019, 08:41:06 PM ---But the velocity is not significantly capped and the transaction fee from miners is a large factor in this.

--- End quote ---

What would be the expected effect of mining with free energy on velocity and fees?

David in MN:
There is no limit to Bitcoin. If a limit ever was a threat to the Bitcoiners they would just do another fork (already done 3 [Cash, Gold, SV]). The dev team can print them out of thin air just like greenbacks. They are not a limited commodity like coal or oil or even goat poop.

This is what I get into with the Bitcoiners. My toenails are rare and unique too. And more limited than the ever forking Bitcoin. They're just not worth anything.

I remember being pumped about Bitcoin in 2011. It would reduce transfer costs below credit cards and beat the pants off Western Union. But to talk to a modern Bitcoiner you'd believe them insane. It shouldn't be usable as a currency, should have high transactional costs and long lag time, and the proper way to make money is to "hold" an "investment" that pays no dividend.

You can even point out that it tends to fork during breakouts thus guaranteeing a lower price. But in talking to Bitcoiners you'd just get some gibberish about private keys. They don't understand the underlying economics. I've lost a handful of friends because of this.

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