Does anyone know how to register an email with your shares? Am one of the earlier owners that only had to provide a BTC address for ownership. Now it seems you need an email registered with your shares to send them to havelock.

There ever exists only 2 types of investments. I being investments and R being next period returns and currency being capped:

1) I
2) I>R. Keeping the money makes more sense then investing. So these investments are never made.

The problem with a capped currency is almost all investments fall into category 2 and therefore a bitcoin only world would stifle investment.

Read more: https://bitcointalk.org/index.php?topic=213860.0

PM me. Thanks.

For simplicity:

There ever exists only 2 types of investments.

1) I
2) I>R. Keeping the money makes more sense then investing. So these investments are never made.

The problem with a capped currency is almost all investments fall into category 2 and therefore a bitcoin only world would stifle investment.

The interest you get from your bank deposits now are due to fractional reserve banking. Because your bank stores a fraction of your deposit, and gives out the rest as loans on which they charge interest on, you get interest on your dollar. If banks couldn't do fractional reserve banking, there would be negative interest on your bank deposit.

BitFinex can provide interest because the bitcoin money supply is still growing.

Consider the following:

1. Money supply = 1
2. N people in the world.
3. 1 of the N (lets call X) has 0.9 of the money supply and the rest divided evenly. 0.1/(N - 1).
4. Because X has a significant proportion of the money supply, capital has to come from X.
5. Only X can invest and improve the lives of the other N - 1 population.
6. X will only invest if he gets a positive interest.
7. X provides a loan of 0.1 to someone from N - 1 (lets call Y) with an interest of 10%. X requires a repayment of 0.11.
8. Because money is capped = 1, there is no way X will get back the loan + interest unless Y gets some of the 0.1 from the rest of the other (N - X - Y).
9. Now the whole world is left with 0.09 to be shared instead while X goes up to 0.91.
10. Repeat this process several times and X ends up with almost all the money supply in the world while you and I share a smaller and smaller portion of a smaller and smaller money supply for the rest of N - X.

This, I'm sure you agree is unsustainable.

If you think about the simplest example, I ask: why not buy an ASICMiner for 50 BTC? Simple because you know that investment (of 50 BTC) will never get you > 50 BTC. Similarly, when the bitcoin supply gets capped, investors would not invest, why? because there is no more money to get hold of in the next period. The only way to do this is some people in the economy consistently lose money until they are at 0 balance (supply is capped remember so in order for you to get investment + interest, someone else has to LOSE). Having a significant amount of people in poverty (0 money supply) I'm sure is not good for the welfare of the greater population. Unless of course you say you are a benevolent individual who freely gives his money away.

Sorry but 1 bitcoin tomorrow will be worth more, we can debate on the importance of choice today vs quantity tomorrow but if supply is capped, today 1 bitcoin buys you 1 pen but tomorrow 1 bitcoin buys you 2 pens because more pens are being made and bitcoin is limited.

Note that in my model, money is capped to 1 (divisible infinitely). We can't expand money. So there's no inflation. Not sure how we would get interest here.

Sorry but if money is capped then won't money today be worth more than money tomorrow? Think about it, if you could only ever have 1 dollar divided in between everyone in the world, wouldn't your portion tomorrow be worth more than it is today? Today I invest 50 bitcoins buying 1 ASICMiner blade, but I know I will never even get 50 bitcoins back (exponentially rising difficulty, more people getting asics, BFL to ship, etc). So I don't invest. No reasonable person would invest 50 bitcoins today to get some <50 bitcoins in the future. So I require R>I to invest. Wouldn't you?

How are there interest rates in a world where money is finite?

bump

This is how I meant it to be:

http://i.imgur.com/FmpcmeO.png


I have 10 in my pocket now. Let 10 = x. If I invest 10, I invest x. If I didn't invest the 10, how much would I have? 10, which is x.

What I invest = 10
What would I have if I didn't invest? the 10 in my pocket.

Is 10 = 10 not the same quantity? Is there something wrong with this assumption? Sorry I'm not getting where you're coming from.



Even if you didn't invest, population grows (unreasonable to assume we can stop this), your 10 is now worth more in real terms of distribution of income. In this case, the 8 I used to hire 16 singers in the next period to sing to me, is most certainly less than the number I can hire if I kept the 10.

Appreciate the comments

I recently came across Freicoin and demurrage. Extremely interesting concepts. Couple of question though;

1. Why would any reasonable merchant/seller/firm accept currency for their goods and services if it is common knowledge? Wouldn't they rather have currency that stays the same in face value or even goes up in face value?

2.  Is the supply of Freicoin limited as well? Can't seem to find this on the wiki/site.

Sorry, you seem to be misinterpreting a lot of these. Firstly it doesn't matter how you label 2 consecutive periods. It can be period 1 and period 2, today and tomorrow, period 0 and period 1, period t and period T, 2011 and 2012, etc. Its just a reference to 2 time periods.

For the first part:

y comes from investing x in the prior period. We both agree that the nominal value of what we have now decreases, thus the x that we had in period 1, in nominal terms would be worth more than y period 2, hence x > y. Suppose instead of using x to buy 1 good in period 1, we invest that and get y in the next period and y = 2 goods, then instead of investing x in period 1 we save it and bring it forward to period 2, because x > y (we both agree on this, the nominal value we get from investing anything is a lower nominal value next period, why? because of the limited supply of money) and y = 2 , then it follows that x > y = 2, i.e. we would be better off not investing.

Secondly,

No one said I'm investing 10 and "instantly" getting 8. I don't really get where you come across me saying non-zero period of time. Using 2 time periods again, period 1 and period 2. Both time periods can have a start and end (i.e. Jan 2011 and Dec 2011, Jan 2012 and Dec 2012, 2 time periods). At the start of period 1, we have the choice of investing 10 or saving 10. If we choose to invest, the return we get is at the beginning of period 2, the return of which is 8 (once again, we both agree the nominal value of what we are holding drops if we invest). If we choose to invest, we get 8 in period 2 which we can use to buy 8 goods. BUT what if we decided to just put the 10 into our pocket at the beginning of period 1 instead of investing it? THEN at the beginning of period 2, we most certainly still have 10 of which in period 2 can buy us 8 goods + more. This proves we are better off putting the 10 in our pocket instead of investing.

Perfect information and perfect competition are unlikely to economic situations though is a benchmark case necessary to analyse before moving forward into imperfect markets.

I invest x today which buys one output so tomorrow I can get double the output for which the value is y. If y < x (we both agree in nominal terms we have less money), then it is certainly better I not invest x in the first place because y = 2 output and x > y, thus x > 2 output.

Consider 2 periods t=0 and t=T. Any any real positive value at time T will hold for time t=0 irregardless of the nominal value, wouldn't you say so? If I invested 10 at t=0 and get 8 at t=T and at t=T, 8 buys me 8 goods, wouldn't that 10, I spent at t=0, if saved and spent at t=T buy me 8 goods + more?

Lets include investment risk in the model. Combine this risk with the fact that money will not expand the next period and you get an even stronger case for the 0.9 currency individual to NOT invest in improving goods for the next period. Why would he? The most he can get is a smaller part of that 0.1 currency left and even that is uncertain (risky).

I myself believe that Bitcoins are undervalued and so I have them. In my model above however, we use a currency (may or may not be bitcoins) as money which facilitates transactions, not as an investment tool/commodity.

1. Assume perfect competition (reasonable assumption for analysis before we move on to other market models, this is the status quo in bitcoins; no regulation, free market entry, etc), no firm invests (I) today unless tomorrows revenue (R) is higher than the investment.

2. Higher I in a prior period results in higher R in the next. At any I < R, firms make a profit the next period, new entrants can enter and invest some (I + small amount) such that R > I + e > I.

3. In perfect competition, I = R because both firms (or any number of n firms) will invest up to a point just below I > R.

4. Limit currency to 1 (divisible infinitely).

5. Population n and amount of total goods and services x are growing. Note that investment is not needed for either of this to grow. Someone might find a new mineral, new population = new labour, etc.

6. Because 4 and 5, then 1/n and 1/x is decreasing. Population n has to spend 1/x on goods each period.

7. Assume perfect information and n buys all x goods produced by firms.

8. Because I = R, firms investing gets a smaller and smaller balance sheet as the time period increases infinitely.

9. Knowing that, and playing the game from 1 to 8, firms hold onto their money instead of investing.

10. 9 is especially apparent if  one firm is starts out the game endowed with a significant proportion of the currency. E.g. If any one firm holds 0.9 currency (arbitrary value), there would be no way any competitor can invest and come out on top because the sum of money = 1.^*

Hence, no investment, which is needed to improve social welfare. In a one economy world with limited currency, money can't expand to attract investments so they obtain more in the next period because everyone knows in the next period, the quantity of money is the same while more n people and more x goods chase the same portion of 1.

^* Note that the current distribution of Bitcoin is also skewed with a smaller proportion holding a significant amount. Read: http://eprint.iacr.org/2012/584.pdf

No math/econ expert by any means and would love to hear your thoughts on this.

Edit:

Simple example:

There ever exists only 2 types of investments.

1) I
2) I>R. Keeping the money makes more sense then investing. So these investments are never made.

The problem with a capped currency is almost all investments fall into category 2 and therefore a bitcoin only world would stifle investment.

Requesting more Oceania (Australia/NewZealand) friendly time zones.

Public & escrow. Thanks.

10@2.5

Looking to buy 10 ASICMINER shares. PM me with price. Thanks.

If anyone wants one of these, they can take my place as I am in Batch #3. I tried to raise that amount of BTC but now can't quite afford it. PM me if you want to take my place.

Edit:

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I have been unable to come up with the required BTC for my single (1) unit in Batch #3 and therefore am transferring my position to ahitman@bitcointalk

Date: 19/05/2013
Details: https://bitcointalk.org/index.php?topic=201753.0
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Pastebin Contract: http://pastebin.com/raw.php?i=Kk46ccPW

1 @ 50

How long did it take you from paying out to actually seeing the transaction on the blockchain? 50btc is showing me a txid that doesn't exist...