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Re: Wall Observer BTC/USD - Bitcoin price movement tracking & discussion
by
kkaspar
on 28/02/2014, 02:20:50 UTC
There are two reasons why "countries", really governments of countries, wants fiat money in stead of sound money. Number one is that they can repeatedly, without their subjects discovering, steal from the money supply.

Fiat money and sound money aren't opposites. There are fiat that are soft and there are fiat that are hard. People are whining that money isn't directly connected to gold anymore and they don't even bother to study why. Instead of gold, today we have the petrodollar, where the actual thing that gives value to the dollar is oil that has better practical value and less speculative value.

How come can the government, or more specifically an politician, steal more in case there is a steady inflation rate?


Number two is that they think they can force investments through the zero interest rate policy. They can not really, because the credit made available goes to suboptimal production, sometimes even capital consumption, taking everybody down in the process.

Sound money (of which bitcoin is an example) is in the interest of everyone except governments of countries.

Problems with suboptimal production and capital consumption come from places that lacks education, tradition and culture. I think you are right on that, there is a connection there on how more developed societies can handle themselves better under more intensive investment pressure. There could be a rule that less developed countries need stable deflation rate instead. But.. in this subject we are talking about bitcoin, that has no stable deflation rate. It is volatile and with a never-ending rise. It's a beautiful piece of art, but it has no place in serious finance because of that.
It's job is to introduce the entire subject, so it needed to be attractive to the regular folks who believe financial fairytales. Through regular people, the subject can also reach more influential people, who can start implementing the realistic parts of that idea to everyday finance.

There is no use trying to convince me that bitcoin can survive more then couple of years, before it will get eaten by competition. To me it sounds like, when someone is the first to struck oil, and then no one else on earth will drill for oil any longer, because someone else already did it. Creating the perfect digital currency will soon be the holy grail to everyone who consider them to be geniuses at software engineering.