Quote from: cypherdoc on July 01, 2011, 01:06:10 PM

Bruce,

you were ON baby with the Timpone interview. you finally hit all the major rebuttal points that i've wanted you to broadcast to the world about the Fed, gold, inflation, and bitcoin.

one thing i'd like to emphasize is that you seem to imply that the price of btc will keep on rising forever while the price of everything else will fall in relation to btc. while i agree that btc still has a long way to rise, i think its important for people to understand that at some price it will level out and become a stable, constant, currency that doesn't whipsaw up and down like it is now in its infancy.

the reason this point is important is that if it did keep rising forever, number one it would crush the value of everyones other investments (homes, stocks, commodities, whatever) and this scares people. we don't want to scare people.

Bruce misunderstood Patrick's question (which came from Andy Gauss) and answered it with "but Bitcoin is infinitely divisible" (Patrick seemed confused and didn't ask for clarification). It doesn't matter if it's infinitely divisible (which is a hyperbole by itself), the point of the question was the above. Most people will have other holdings/debts (a house/mortgage, car payments/amortization, maybe gold/silver, pension in USD etc.), which will indeed be crushed if Bitcoin keeps deflating exponentially. And if Bitcoin is successful, it has to keep deflating a lot before equilibrium is reached, which could be ongoing for decades.

That's a major issue to which I haven't heard a proper rebuttal yet, it has been routinely sidestepped. Also, even if you could, you wouldn't want to convert your mortgage into BTC, because if you have to pay back 10k BTC now, a few years down the line when the BTC/USD value will have gone up by a magnitude, your debt (mortgage in BTC) will have gone up by a magnitude too. The only way to equal that as far as I can see is to hold as much BTC of your own to compensate, but that kinda makes having a mortgage pointless, so we have to assume that the mortgage is needed and therefore a heavily deflating Bitcoin is a disaster.

The prevailing argument seems to be that this will prevent lending (banks will want to sit on Bitcoin because it should generate much more revenue than interest or trading and people would be crazy to take on loans that increase their debt exponentially). Which would mean that noone could buy a house upfront unless they already had the money for it. This has far reaching implications, it would impact the automotive industry, shipping, commercial building in general (how do you get loans for railways, airstrips, harbours, bridges etc.?), anything that requires an upfront investment that is regained slowly over years.

I guess one answer would be that you would want to use USD or whatever for all of those things and BTC for everything else while BTC slowly takes over, but somehow I'm skeptical about this working out without almost something like a planned economy. Why would a bank not convert all of their USD into BTC for maximum ROI as soon as they saw where it was going for example? And this would accelerate the demise of USD (or whatever has taken its place by then, after QExxx) as well, which would cause chaos on a massive scale. I don't think that the argument flies that people will be forced to abandon rampant consumerism, because you have to buy food, shelter, medical care, education for your children etc. with something.

Quote from: cypherdoc

overall, great show and i watch it everyday!

I watched a couple of them in succession, the one with Stefan Thomas was great, very intelligent, precise and sympathetic too, someone I would gladly work with. The episode before that was a good rant

Bruce: a criticism you must have heard before is that you seem to be engrossed in your own world most of the time. Particularly when the guest is speaking, don't concentrate on your laptop/chatroom/forum/papers, pay attention to the screen. Have your production assistant do the other stuff (wear earpiece for prompting). Also, you're on screen, not on radio, we can see every hand gesture regarding text messages and whatnot. It may be a good idea to get more suitable chairs as well, you're slouching