Quote from: jing_troop on March 26, 2013, 06:35:44 AM

Quote from: AnonyMint on March 25, 2013, 06:08:52 PM

The long-term and short-term expectations polls, both show extreme ponzi valuations. And interestingly bitcoiners aren't as interested in the short-term 2017 time-frame. Their expectations skew is Bitcoin will overtake the world long-term. Speculative investments shouldn't be valued extremely long-term too many variables change. Any seasoned investor knows this.

What you have here, is Satoshi cleverly hoodwinked goldbugs (knowing their psychological weakness) think that Bitcoin has the properties of gold (but it does not!), and so these naive investors pile in long-term thinking it changes the world. This has NSA finger prints all over it.

Besides gold has never been a superior currency nor investment over long-term. Go dig into my links, I have all the historical data to proof of that claim.

REALITY CHECK!

Just for fun, a market value list of gold for several decades passed: https://raw.github.com/datasets/gold-prices/master/data/data.csv

This myopia is central to Satoshi's ability to create a market value with his "gold" (scarcity) design.

Gold has an intrinsic value because it is used as a physical commodity, and the most important use is central banks hold it. This is why although gold skyrockets, then crashes, it never crashes to 0. Silver is heavily used in industry, this is why it can never crash to 0.

The key is that the most astute and wealthy capitalists will hold gold and silver long-term, but they will not hold Bitcoin long-term, because they understand that the free market rewards those who correctly assess value. Ask Warren Buffet about value creation.

Bitcoin has very, very low instrinsic value, because of it can't be used as a stable unit-of-account.

IMO, like all ponzi schemes the believers will make denial rationalizations (and even get angry at people who present them facts) as to why it must have intrinsic value, and thus it will continue to skyrocket in price for as long as greater fools can bring more money into it.

But when the next general economic liquidity crunch comes, many of these fools who put too much of their networth into Bitcoin, will have to sell in a panic. This will pop the bubble (circa 2015 - 2017) and then the stampede will be on, because there will be stories in the news about how there is very insignificant transactional and unit-of-account usage of Bitcoin by businesses and the profitable and productive sectors of the economy who are the only sector that matters for generating value. Don't forget my point that spending money on goods and services drives value of the currency higher, because the businesses can reinvest in greater productivity gains from profits.

To understand money, you need to understand the economy, see How an Economy Grows and Why It Doesn't.

Bitcoiners will rationalize that gold is a superior money because they claim that no one can debase it. This so stupid. First of all, both inflation and deflation concentrate wealth to the rich. Secondly, because of this concentration of wealth under gold to the rich, the public will never allow it! You get a world war if necessary, but the public will always demand debasement, and there is no technical way to stop it (not even Bitcoin is immune, the government can easily subvert it when they are ready).

And this is the way it should be! A free-market does not mean that it is a merit to encourage non-productivity by erroneously assuming that BLIND capital can invest most efficiently in productivity. The larger the capital one has, the less knowledgably one can allocate it. This is a fact. This is because innovation is born in the small, and no person is omniscient. This is why the Bible says that money will fly away.

Storing past productivity and holding the future in chains with your past accomplishments, is the antithesis of prosperity.

Yes we need some savings, because this represents sacrifice and hard work, which is a merit based system.

But we also need to debase the capital over time, so that the rich don't have an unfair advantage to make the innovators slaves to the lack omniscience.

The philosophical paradigm of Bitcoin, is that the early adopters from first 4 years will have 50% of the money supply. That is insane and will never be allowed in a meritocracy. The free market will never allow this. Yes people should profit on their innovations, but they should not have 50% of all future production. Society will go to world war if necessary to remove those chains.

The technological innovation of Bitcoin that I love is that no person can control the debasement. However, with Bitcoin this is not true. Satoshi controls the debasement and he got some (large chunk) of that 50% of the money supply.

So I would like to take his technical innovation and put it in a new bitcoin-like system where the debasement is automatically adjusted by a mathematical algorithm designed to get a balance between transactional and unit-of-account usage versus store-of-value usage. To prevent it from sliding into the ponzi scheme outcome.

CAPICHE?

P.S. Dunning-Krueger dolts who think I don't realize that Satoshi can't change the preset debasement schedule, that is irrelevant. He alone decided it. And it is insane and not a merit-based duration as I explained the reasons why above.