Quote from: Hydrogen on March 29, 2017, 10:52:54 AM

Its difficult to say what is a good or bad strategy in terms of holding time.

That didn’t age well.

Quote from: tadamichi on Today at 12:29:21 AM

Satoshi nailed the core monetary design. Any change there would lead to worse money. There’s still a lot of room for users improving their practices around using Bitcoin.

Quote from: OgNasty on August 02, 2022, 11:48:52 PM

One of the first things I looked into when discovering Bitcoin was the total supply (so that I could calculate market cap) and discovering that it was capped at 21M was the first successful "sniff test" that Bitcoin passed. If it wasn't for that 21M cap, I would have probably never looked into Bitcoin more than that first day.

In my opinion, even more important than Bitcoin’s anti-inflationary hardcap is the reliability and predictability of its monetary policy.

This point has recently been driven home to me by my long-term involvement in an altcoin. It is an altcoin with excellent, very important new technology—in my opinion, one of the few altcoins that even has a reason for existing. But the coin itself is economically unreliable. It started with a monetary policy mostly copied from BTC—with some differences that I believed were well-justified, honestly declared upfront, and known in advance. I used it for years, without consistently following all of its news; I simply used it as money, just like >99% of ordinary people use fiat currencies without following the details of central bank policies.

While I wasn’t looking, they made some changes to its monetary policy. Then, they proposed drastic monetary changes for switching to POS. Meanwhile, because the coin has lost about 97% of its value against BTC in the past five years, there are some shortsighted users screaming for more changes to the monetary policy, to try to pump the price.

I have been left talking myself blue in the face, trying to tell people that people trust BTC because it is reliable. You can buy BTC, put it into cold storage, go into a coma, wake up years later, and still have the BTC that you bought: The implementation may change, the technology improves, but the supply and the issuance schedule are carved in stone.

It is why I trust BTC. It is also why billionaires trust BTC. So if your coin is failing and falling behind BTC, the answer is to make it more like Bitcoin, not less like Bitcoin. Think long-term. Treat the monetary policy as a promise that must be kept. For better or for worse, the coin committed itself to a Bitcoin-like monetary policy when it was created. Now, focus on building demand, instead of destroying trust and confidence by making changes on the supply side.

(Do you suppose that my advice is heeded? What do I know: I am an awful “Bitcoin maxi”, talking about how great Bitcoin is.)

I myself do not overly idealize Bitcoin’s monetary policy. I recognize that it makes a design tradeoff, for the reasons stated below. I even think that there is room for research and experimentation in the monetary design space. But I recognize the reasons for Bitcoin’s design tradeoff, and the benefits it thus attains; and most importantly, I know that Bitcoin is Bitcoin because you can have confidence that BTC will never make unexpected economic changes that you may disagree with, or that may occur while your attention is directed elsewhere. It is what makes Bitcoin a virtual analogue of gold.

Now, I think that past commentary can sometimes elucidate a current discussion. On the general question of Bitcoin economics, and of how its monetary base works in practice, I recently perchance happened across something interesting—by coincidence, these posts were made only a few hours after I registered my forum account:

Quote from: Lauda on March 29, 2017, 10:54:23 AM

Quote from: Hydrogen on March 29, 2017, 10:52:54 AM

The closest investment analogy to a bitcoin hard fork could be a stock split.

No.

Quote from: Hydrogen on March 29, 2017, 10:52:54 AM

If a hard fork occurs, the total number of bitcoin's will increase from 20 million to 40 million coins.

Wrong again. The supply of Bitcoin remains the same. What happens is that you create an altcoin with the same (existing and projection) supply of Bitcoin.

Quote from: Hydrogen on March 29, 2017, 10:52:54 AM

That could mean that bitcoin's price will split by roughly 1/2.

No.

Quote from: Hydrogen on August 02, 2022, 11:51:58 PM

In which case, it is possible that there is room for improvement as far as BTC design and development go.

Economically, no. Bitcoin evolves technologically; but the BTC monetary policy is absolute, reliable, predictable—trustworthy. If you disagree with Bitcoin’s economics, please feel free to create an altcoin. It is permissionless. There are now tens of thousands of altcoins competing with Bitcoin. They don’t seem to be doing very well.

Quote from: tadamichi on August 01, 2022, 02:16:21 AM

I like the idea of having correcting threads.

Thanks.

Quote from: tadamichi on August 01, 2022, 02:16:21 AM

What some people might not get is that every traded asset underlies market forces regardless, and Bitcoin specifically is also kinda cyclical. [...]

A few more things that many people don’t get:

0. The Bitcoin supply is still inflating. In its earliest years, especially before the first halving, Bitcoin had an extremely high rate of inflation. The inflation rate is now low; and in a few years, it will be negligible. Meanwhile, Bitcoin has already behaved as economically deflationary overall, due to the next item.

1. Many Bitcoiners, and especially many altcoiners forget that supply and demand has two sides: Supply and demand. I have seen shitcoiners try to raise the value of their coins by burning a portion of the supply. It does not do much, if demand is insignificant. Bitcoin price predictions and especially, 4-year cycle theories commit the same fallacy when they are based too much on the supply side, without adequately considering demand. Bitcoin’s value has skyrocketed because growth in demand has far outpaced the simple, deterministic rate of increase of the supply.

2. Central banks use monetary policy to control the supply of a currency, and also to manipulate demand. (Example of the latter: During the Soros Black Wednesday attack on the pound’s peg, interest rates on the pound were raised to try to stimulate demand for the pound—to encourage traders to hold it. It didn’t work.) Satoshi created Bitcoin with a simple, deterministic, absolutely predictable monetary policy baked into the code. This is a tradeoff: Bitcoin lacks any means to respond to the market, as some central bankers historically sometimes have in a beneficial way.

The result is volatility. But this also means that nobody has the power to corrupt the money to the detriment of holders—as many central bankers very often do in a prejudicial way, almost inevitably leeching real value out of innocent people for the benefit of those who least deserve it. The same design trade-off that makes Bitcoin wildly volatile, also makes it a safe harbour: The value of your BTC may fluctuate at market, but nobody will suddenly create unexpected new BTC that unpredictably dilutes the value of your BTC. Which leads me to...

3. Bitcoin arose in an historical context that must not be forgotten. Most people have short memories; and some people are young. Those who remember the 2008 global financial crisis will better understand Bitcoin and its economic design.

https://en.bitcoin.it/wiki/Genesis_block#Coinbase

Hardcopy: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks”

It has happened before. It has happened many times. It will happen again.

Only the most virtuous governments can consistently resist the temptation arbitrarily to devalue their currencies, when political pressure (or political convenience) so demands. Even in societies that used coins made of precious metals, governments would not infrequently reduce the weight of a coin while attempting to retain the same face value, or reduce the purity of the coin by alloying it with base metals, and so forth. And now, governments and central banks have the monetary “tools” of the worst scam in the history of the world: Modern fiat money, which has an unbounded susceptibility to manipulation and inflation of the monetary base.

When corrupt governments and corrupt bankers collude to rip off the value of your money, you need some form of money that is not under their control.

Quote from: NotATether on August 01, 2022, 05:00:24 AM

For all the "gold fools" reading this:

https://bitcointalk.org/index.php?topic=5408390.msg60673804#msg60673804

Quote from: bittraffic on August 01, 2022, 05:08:49 AM

They'd have to be corrected because somehow, it keeps me up all night if they are still misinformed. Do not delete it, I'm with you. Grin

Indeed. ;-) So many someones are so wrong on the Internet, I need to inflate to supply of me so that I can be everywhere at once, and have the time rebut all of the wrongness. Alas, the supply of me seems to be hardcapped. Angry