Quote from: becoin on August 17, 2011, 03:47:59 PM

Quote from: miscreanity on August 17, 2011, 03:29:29 PM

Try not to get caught up in the details.

I'm not, you are. You are missing the bigger picture. To make a trade happen easier is just the same as giving the buyer easy money. That should never ever happen or you intentionally create bubbles in the economy.

No need for accusation. I have to differ with you on the suggestion that making trade easier is the same as providing "easy money". While I do agree with you that what we call easy money results in bubbles, it's outside of the actual currency demand from an economy. I also think the excessive availability of it is made possible primarily because of the human control element.

It might be good to elaborate on what I consider "easy money" and how it results in problems. In my view, it's a supply of currency above and beyond that which is demanded by the overall economy (consisting of individuals, businesses and the market systems utilized by them to engage in transactions). Because central banks of today use crude methods to determine demand for money, the granularity is often too large to be effective without introducing major price/value distortions.

Each time an intervention occurs, it distorts demand. If the distortions aren't allowed to recede, further interventions that supply "easy money" will exacerbate the problem until it is no longer possible to compensate and the money supply is so far removed from real demand that bubbles form (demand that responds to the increases in money supply as opposed to real assets and productivity).

What I've described goes beyond simply making trade easier and crosses into the limitations of human perception on grand scales. Trade only gets so easy - the excess doesn't help. Because Alt/Bitcoin manage themselves internally, these distortions are virtually impossible. When distortions begin to occur, the system self-corrects. I'm sure there will eventually be certain specific situations where complications could arise, but for now they are two sides of an extremely sublime system (the combination of cryptography, triple-entry accounting and distributed networking/processing).

It's somewhat similar to a parent (as a central bank) attempting to control a teenager's habits (which is impossible, as the parent cannot watch the teenager 24/7) and the teenager (as the currency) learning to take care of himself (he is always around himself and his decisions affect him directly so he would know immediately, or very quickly, when action needs to be taken).

Oh - I keep wanting to squish your user icon