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I see. And I realise I must correct myself. Hoarding doesn't cause deflation, an increase in the hoarded money pool does. A decrease causes inflation.
The more constant that pool is, the more stable V and P.
The more constant that pool is, the more stable V and P.
Yes, the technical term for it is demand for money. A rather unfortunate one, since simple souls (and most of the economists) take it rather literally. As demand for nominal money, little peaces of paper with portraits of dead leaders or their electronic equivalents. It's a related topic, that's why I mention it here, but.. just mention. FTM.
There should be no difference between investors that rely on loans and investors that doesn't. The self-financing entrepeneurs should think that they're lending to themselves. All borrowers and money holders investors are competing in the same market, the money holder must account the costs of capital-money even if he doesn't have to borrow it.
Yes deflation can lower interest rates (negative inflation premium) but it cannot lower the interest to zero.
Yes deflation can lower interest rates (negative inflation premium) but it cannot lower the interest to zero.
Well, the world just doesn't work this way, and there's a difference between investors which rely on loans and those who do not. The loan market is an attribute of a rather developed and sophisticated economy and you can have (and there are) investments even without loans markets. Robinson Crusoe Examples to Rescue!
And when looking at the relation between investments and loans, I insist in treating the investment as the more fundamental.. eh... whatever. If you have an investment project and you think it will be profitable then there is also an opportunity for a loan. Rate negotiable, but greater than zero and lower than the expected rate of profit.
So, in order to prove (credible claim) that price deflation (in the conditions of stable money supply and increasing technological productivity) will kill the loan market you have to prove that such conditions will turn all investments projects into unprofitable one. Now.. are you accepting the challenge?
My point that an increase in the hoarding pool doesn't lead necessarily to more investments. You assume that someone will buy the bricks, but they can stay in the stock of the producer. Or the deflation can force him to sell them at a lost, which will cause is bankrupt. Wasn't his business profitable? It was without deflation, but not with it.
Business plans going bad? Happens all the time. People learn and try to be wiser next time. But, I have to say that you are saying here is slightly different from your original position (as I understood it). Namely that saving can lead to losses for the society as a whole, not that saving is inherently harmful.
This may be the central point of our disagreements. You say that money can't yield on its own, it needs profitable investments.
But money performs services on its own and "it can charge" for those services.
But money performs services on its own and "it can charge" for those services.
Well, I guess that exactly for that "services of its own" that markets choose a commodity to serve as money, medium of exchange. Also it is "it can charge" or "it can't charge" If the second that's part of the appeal for holding money.
Money is by definition the more liquid asset. That represents an insurance against uncertainty that the money holder gets for free. The rest of the money users are paying indirectly for that insurance.
OK, someone gets something for free. Relatively speaking. So much I get. How is this a big deal? Where's and who's the victim?
Also, money is needed for trade, even when there's no profitable potential investments nor growth. And "the wares pay" for that reallocating service. The basic interest is included in the final selling price of every product. The merchant not only collects his wage from the final selling price, but also the interest on the liquidity he needs in his operations. Again, if the merchant have the money, it should consider that he's lending to himself, because he's competing with other merchants that operate with borrowed money.
In this sense, capital-money is the only authentic capital (here I define capital as something that has sustained yields rather than means of production) and the interest rate is what protect the means of production (that need financing to come into existence, not simple nets) yields. Capital that won't yield as much as money does is simply not financed, and that prevents further competition within a certain type of capital.
In this sense, capital-money is the only authentic capital (here I define capital as something that has sustained yields rather than means of production) and the interest rate is what protect the means of production (that need financing to come into existence, not simple nets) yields. Capital that won't yield as much as money does is simply not financed, and that prevents further competition within a certain type of capital.
Market prices, market prices, market prices.. For goods and interest rates. Also there is no such thing as basic interest and hold money does not yield (monetary) interest.
Your theory of value seem to be a variant of cost theory of value where as a fixed cost into the price of every good enter the (a fixed?) interest rate on the price of loaned (own) capital. But that's backwards! First it is from the prices of goods that prices of inputs are inferred, and second interest is also a market price set by supply and demand.
Well that's about it. Also about that "free insurance" that you seem to hate so much. Like it or not, but there is a demand for safe, long term storage of value. And if money cannot server as such a storage people will start looking for substitutes.
Do you really think that it is better for people to save in paintings, old violins, even gold? Shotguns and canned beans?
I don't get it. If someone hoards a fixed percentage of his income, the amount of money in circulation is getting smaller and smaller.
Well, maybe I could have said it better. The only reason to save money is for spending it at later date. So for every 10 (20) hoarders who do not spend right now, there's an ex-hoarder who just now spending, spending, spending. Then he will start "hoarding" again, and someone else will spend. That is what I had in mind when speaking about a "constant rate of hoarding".
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No. I mean the price of the capital is being reduced and also its nominal yields (assuming the percentual capital yield remains constant).
And the problem is? While it may be only half of the old price but every coin can buy now twice as much.
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Yes, in my example, the baker will buy his supplies cheaper and could also maintain his standart of living with a lower wage, but the interest he's paying for the loan stays the same. Also, if for years he only pays the interest and then sells his capital to pay the principal of the loan, his nominally devalued bakery won't pay the principal of the loan.
I'd say you should qualify your "Deflation is bad". Namely, deflation is bad for entrepreneurs/investors who heavily rely on loans, and especially those cannot learn neither from thought experiments nor experience. Also if everybody expects price deflation even a lower percent become more attractive for lenders. Especially if those are long-time savers.
Call me an optimist, but I really do think that people will learn. If a project is worth starting purely from investor savings then there is a loan percent at which it worth starting from loans. And only foolish investors... but that's obvious.
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So if I hoard 200,000 bricks in my house that's going to investment?
Now, that was funny. No, that's not investment. But if you sell the bricks and keep the money, the price of bricks will go down and investors needing bricks will get them cheaper and this way you'll have more investments.
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1) Not all what is saved is invested.
2) Deflation makes money-capital more desirable in relation to real capital, but money-capital doesn't produce anything if it isn't invested/lent.
2) Deflation makes money-capital more desirable in relation to real capital, but money-capital doesn't produce anything if it isn't invested/lent.
1) And there's no need for it. Saving (as in "hoarding") can pull out of circulation a certain amount of money, but it will not pull out of circulation the produced goods. The one which were already sold by savers.
2) No money-capital doesn't produce anything. But... Money hold as capital (uninvested), lowers the prices of goods for money which is invested and makes the investment money more productive.
Enough, I think. The other points are either minor disagreements, or, IMHO, will add little.
I understand that, hoarding causes deflation.
Not exactly. An increase in hoarding, ceteris paribus, will lead to price deflation. But there's absolute no reason why a constant amount of hoarding (as, say, percentage of income) should lead to price deflation, since the amount of money in circulation stays the same.
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deflation devalues real capital
I must confess, that i'm slightly puzzled. What does that exactly mean. Decreased physical output of real capital? Hardly. (And what is the *un-real* capital, for that matter). A decreased return on investment? Well, I don't know. The monetary return can be lower but the costs of operating and replacing the capital will also be lower. (As for past costs those are always sunken costs.)
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and that doesn't encourage investments.
Let me put it that way. There is a current consumption fund and there is a investment fund which is equal to total production - current consumption fund. Anything which increases the investment fund encourages investments. And if you think that price deflation encourages savings and think that investments are good thing you should hail price deflation. Because it increases the investment fund. And that's, what investment's are made from.
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The thing you fail to see is that money is a common. You're holding it now, but it belongs to the whole society because it is an abstract good, an agreement. The money you hold could be worth nothing overnight if society decides so.
So the way people saves should be the way that the society benefits more, and that's not hoarding.
So the way people saves should be the way that the society benefits more, and that's not hoarding.
No, I no do not see money as a common. As a tool which allows us to coordinate our activites and extend cooperation between people, yes, as something belonging to some kind of mythical Geia, no. The mythical Geia, is, well, mythical, and for exactly that reason she cannot own anything.
I can accept the "society benifits more" as a shortcut for most people want (will benefit from) more goods, and I agree that the way to having more goods is to have more (successful) investments. But there's absolutely no harm in some people just "hoarding". And I've already explained why.
Savings can be investments or not. But if you save by hoarding, that's not an investment.
It is still savings, and it still is making investments possible (and sound) however in a slightly more roundabout way. The stuff you do not consume remains available for investors as a fund from each to "draw" resources for their investment projects.
And the way those resources are available to them is through lower prices of goods. Since you are not spending, your (honestly hoarded) money is not entering the marketplace and thus lowers the price of your those goods you choose not to consume. As compared with the alternative of you spending all/most of your money.
Let me put it that way. If you are investing (in a traditional way) you are putting the resources you did not consume at the disposal of one investor. If you are just saving, you are putting the resources you did not consume at the disposal of all investors as a whole.
What should you do? Whatever you want, dude.
Re: Today Im meeting the guys writting the new Iceland constitution to talk Bitcoin
Just make sure that their constitution bans legal tender laws and fiat currencies. Use Panama as an example. This is what's been in their constitution since the formation of Panama over a century ago:
"There will be no forced fiat paper currency in the Republic. Thus, any individual can reject any note that he may deem untrustworthy."
"There will be no forced fiat paper currency in the Republic. Thus, any individual can reject any note that he may deem untrustworthy."
I just have to "WOW" this. So: WOW!!!
If we are to accept the "split share" analogy then bitcoin "shares" are already split as far as satoshis (10-8)BTC, bitcoin being just the name for rather great amount of minuscule shares.
Also looking at MgGox trades, buying/selling of fractional amounts of bitcoins is rather common. 10.321BTC, 1.237BTC, and so on.
Also looking at MgGox trades, buying/selling of fractional amounts of bitcoins is rather common. 10.321BTC, 1.237BTC, and so on.
Q: Security advantages when signing transactions with the phone?
Let's that we have roughly the same client, with a little twitch. There's no private key in wallet.dat. The client can still accept payments and display the balance[1]
Now, when the user wants to make a payment, the transaction is prepared and sent to the phone (say, via bluetooth) to be signed. A dialog is displayed to the user on the phone, with the destination address and the sum to be transferred, and he is asked to confirm/reject the transaction.
Benefits: No need to worry about wallet.dat. Also, maybe a way to make purchases in brick and mortar stores.
Doubts: Are files on phone safe(r)? I'm worried about trojans, mostly
Malefits: (if that is a word) Obviously more complex. Also, just an idea.
[1]. But the way it may be a good idea to have such a restricted client in POS
Now, when the user wants to make a payment, the transaction is prepared and sent to the phone (say, via bluetooth) to be signed. A dialog is displayed to the user on the phone, with the destination address and the sum to be transferred, and he is asked to confirm/reject the transaction.
Benefits: No need to worry about wallet.dat. Also, maybe a way to make purchases in brick and mortar stores.
Doubts: Are files on phone safe(r)? I'm worried about trojans, mostly
Malefits: (if that is a word) Obviously more complex. Also, just an idea.
[1]. But the way it may be a good idea to have such a restricted client in POS
Because Keynes supports state intervention in matters of money, and states like to intervene in matters of money?
That could be one of the explanations why states like Keynesian theory, but it doesn't explain why most economists do.
Who paying the most economist's wages? Same people who like to intervene in the matters of money?
I'd say that, outright corruption, if anything, is extremely rare. However, at least one prof, confessed that he didn't dare to publish an article opposing the mainstream view for several years, fearing that he may lose his job. But a bias in selection and self-selection of economists is what happens. It starts with public schools and ends with Federal Reserve research grants. Add intellectual fads into mixture.
Also is very easy to be wrong for long time in economics. Unique events, mixed evidence, political pressures. Not exactly a lab.
Look, I have no emotional attachment to the classical definition inflation, but the modern one is bordering on the absurd. Or over. If tomorrow(next year, decade) technologies will evolve in such a way that prices of basic necessities (those whose weight is not zero) will halve, the money supply will have to be doubled in order to avoid harmful deflation?
You already know that's exactly what they'll do..
Yes, that's so. Of course, bitcoins may catch on... (crosses fingers, or whatever...)
OK, I'll bite. So "you" (long/short list of mainstream economic trolls[1]) stand by the textbook definition of inflation? Let's have a closer look at it.
It is just weighted sum of prices. That's it, period. It could have been other weights/prices? Absolutely. Are those weights continually adjusted and tweaked? Absolutely. But it is those arbitrary and tweaked weighted sums which make economics into a science, almost like physics. Oh, really?
Look, I have no emotional attachment to the classical definition inflation, but the modern one is bordering on the absurd. Or over. If tomorrow(next year, decade) technologies will evolve in such a way that prices of basic necessities (those whose weight is not zero) will halve, the money supply will have to be doubled in order to avoid harmful deflation?
Or if the greens will take over and all efficient technologies will be banned as un-green, and the price of those commodities whose weight is not zero will double the central bank will have to halve the money supply in order to avoid inflation?? Is that absurd enough or not yet?
Ugh, now I feel better.
[1] A troll in my definition is one with no interest in understanding the subject.
It is just weighted sum of prices. That's it, period. It could have been other weights/prices? Absolutely. Are those weights continually adjusted and tweaked? Absolutely. But it is those arbitrary and tweaked weighted sums which make economics into a science, almost like physics. Oh, really?
Look, I have no emotional attachment to the classical definition inflation, but the modern one is bordering on the absurd. Or over. If tomorrow(next year, decade) technologies will evolve in such a way that prices of basic necessities (those whose weight is not zero) will halve, the money supply will have to be doubled in order to avoid harmful deflation?
Or if the greens will take over and all efficient technologies will be banned as un-green, and the price of those commodities whose weight is not zero will double the central bank will have to halve the money supply in order to avoid inflation?? Is that absurd enough or not yet?
Ugh, now I feel better.
[1] A troll in my definition is one with no interest in understanding the subject.
Re: From reddit: MtGox might have lost control to the majority of their BTC deposit
Anyone think Satoshi may have hacked Mt Gox to decentralize the coins they were hoarding?
Well, now I do!
Re: [Reality Check!] Strong Indication MtGox Is Packing Up to Run w/ Money and BTC?
If they're indeed fleeing, they obviously do need a few days, if not weeks to deplete their(our) accounts because of the withdraw limit of banks, etc. But they needed to post every few hours to calm us down.
That's Hollywood territory.
While I have a Mt. Gox account I did all my recent trades over Bitmarket
Can be a good option for freelancers. Not so much for merchants. Am I wrong?
@fujiwara
I've read this thread: http://forum.bitcoin.org/index.php?topic=20437.0 some 12 hours ago. Still impressed. Oh, and I'm the wrong person to ask "how can we be sure that it wasn't something like this?"
MagicalTux is.
I've read this thread: http://forum.bitcoin.org/index.php?topic=20437.0 some 12 hours ago. Still impressed. Oh, and I'm the wrong person to ask "how can we be sure that it wasn't something like this?"
MagicalTux is.
[20:51:52] https://mtgox.com/claim?token=foo'%20OR%201='1&email=test@example.com
[20:52:07] LO FUCKIN L
[20:52:17] ya, i buy it considering how the other sqli and csrfs worked
[20:53:25] so he says you can use that sqli (or another) to set how much money your account has, then withdraw it
[20:54:17] you know time frame on when it would have been done? I know one sqli was disclosed/patched on the 16th
[20:54:37] I have no idea if this was ever exploited
[20:55:37] this guy who told me about the vulns was scared of even publishing them, let alone exploit them...
[20:56:22] speaking about mybitcoin exploits:
[20:56:23] well, you know what to do... if they don't react [to your private report] in a reasonable amount of time... >
[20:56:25] i don't even know what the acceptable disclosure path is, when you're talking about what is, in effect, a bank.
[20:56:46] he patched the csrf in mybitcoin over the weekend quietly
[20:57:10] i publically disclosed csrfs in clearcoin (was going to disclose mybitcoin too but he patched while i was putting together email)
[20:57:36] at this point? the correct disclosure method is the normal full disclosure lists, the bitcoin-development list, and the forums. silmutaneously.
[21:00:13] http://stuff.povaddict.com.ar/mtgox-xss.txt here's another fun one
[21:01:03] that doesn't load for me
[21:01:19] does now, nm
[21:02:53] that's csrf not xss ;P
[21:03:13] it's both
[21:03:30] you're taken to a page that executes your injected Javascript
[21:04:15] you've just explained what happened.
[21:05:02] thats the same sqli ius disclosed and got patched on the 16th. whoever crashed the market notice it got patched. used the account he had deposited funds into. crashed the market in an attempt to get it out of the exchange by having btc lowered in value
[21:05:51] jesus christ. fuck magicaltux. lieing and/or incompetennt asshat.
http://lists.grok.org.uk/pipermail/full-disclosure/attachments/20110620/dc3e0783/attachment-0003.obj
[20:52:07] LO FUCKIN L
[20:52:17] ya, i buy it considering how the other sqli and csrfs worked
[20:53:25] so he says you can use that sqli (or another) to set how much money your account has, then withdraw it
[20:54:17] you know time frame on when it would have been done? I know one sqli was disclosed/patched on the 16th
[20:54:37] I have no idea if this was ever exploited
[20:55:37] this guy who told me about the vulns was scared of even publishing them, let alone exploit them...
[20:56:22] speaking about mybitcoin exploits:
[20:56:23] well, you know what to do... if they don't react [to your private report] in a reasonable amount of time... >
[20:56:25] i don't even know what the acceptable disclosure path is, when you're talking about what is, in effect, a bank.
[20:56:46] he patched the csrf in mybitcoin over the weekend quietly
[20:57:10] i publically disclosed csrfs in clearcoin (was going to disclose mybitcoin too but he patched while i was putting together email)
[20:57:36] at this point? the correct disclosure method is the normal full disclosure lists, the bitcoin-development list, and the forums. silmutaneously.
[21:00:13] http://stuff.povaddict.com.ar/mtgox-xss.txt here's another fun one
[21:01:03] that doesn't load for me
[21:01:19] does now, nm
[21:02:53] that's csrf not xss ;P
[21:03:13] it's both
[21:03:30] you're taken to a page that executes your injected Javascript
[21:04:15] you've just explained what happened.
[21:05:02] thats the same sqli ius disclosed and got patched on the 16th. whoever crashed the market notice it got patched. used the account he had deposited funds into. crashed the market in an attempt to get it out of the exchange by having btc lowered in value
[21:05:51] jesus christ. fuck magicaltux. lieing and/or incompetennt asshat.
http://lists.grok.org.uk/pipermail/full-disclosure/attachments/20110620/dc3e0783/attachment-0003.obj
I'll take the simplest case. Exchange of USD to BTC and back. Payments: BTC - the blockchain, USD - PayPal.
I'll take for granted, that someone will write P2P matching software which everyone runs on his computers.
+ Damn convenient
- Security, security, security
Next the risk of counter-party chargeback. How it can be reduced?
So this is my proposal. Feel free to rip it apart. I'm not (yet) emotionally attached to it
I'll take for granted, that someone will write P2P matching software which everyone runs on his computers.
+ Damn convenient
- Security, security, security
Next the risk of counter-party chargeback. How it can be reduced?
- Reputation.
- Proof of work. In order to place an ask/bid some rather expensive computation has to be performed. So that, say, only half of existing bitcoins can be exchanged every 24 hours. The same is true for holders of PayPal accounts, which will also have to provide proof of work in order to ask/bid. Or maybe only for them, since BTC transactions are irreversible.
- Insurers. Can work, but introduces some elements of centralization. Like exchanges.
- Automatic mixing of payments. Not receiving payments from one individual account, but from many. Ideally so, that ratio of fresh/untested PayPal account will be less than 10% initially and 1% when the system will be established.
- Different exchange ratios for tested/tested PayPal accounts
So this is my proposal. Feel free to rip it apart. I'm not (yet) emotionally attached to it
Re: Heavy transaction fee for old account: solution of deflationary spiral
First the proper place to discuss such topics is Economics subforum.
Second there are already 20+ such threads. I for one enjoy some deflation of deflation critics.
Second there are already 20+ such threads. I for one enjoy some deflation of deflation critics.
"POST" or "GET"? I was only reading their ticker from JAVA, and it worked with "GET"
Code:
String tickerURL = "https://mtgox.com/code/ticker.php";
URL url = new URL(tickerURL);
BufferedReader bufferedReader = new BufferedReader(new InputStreamReader(url.openStream()));
String line = bufferedReader.readLine();
bufferedReader.close();
URL url = new URL(tickerURL);
BufferedReader bufferedReader = new BufferedReader(new InputStreamReader(url.openStream()));
String line = bufferedReader.readLine();
bufferedReader.close();
Re: Protecting your wallet. Put it in a hidden pocket.. (read on)
Let's say your wallet does get taken by malware but you have a backup copy. Could you recover and make the stolen one invalid somehow? What happens if there are two of the same wallets on the network? I would think both would become useless.
Send everything as soon as you got a chance to a safe account.
However much I would like for 1BTC to equal 1,000,000 BTC (or whatever), I don't think it can happen. I say the best solution is what we already have. 10grand for a car, 10bucks for a meal, 10cents for candy.
All we have to do it decide on the name. (We can't even decide on a currency symbol, Ƀ or Ⓑ or http://cf.geekdo-images.com/images/pic957445.png) Can't we just say 1BTC = 1,000Oros or whatever? (Ora = Golden in Esperanto) Just choose a name, and we are done. Just make sure the gui text label matches the source code!
All we have to do it decide on the name. (We can't even decide on a currency symbol, Ƀ or Ⓑ or http://cf.geekdo-images.com/images/pic957445.png) Can't we just say 1BTC = 1,000Oros or whatever? (Ora = Golden in Esperanto) Just choose a name, and we are done. Just make sure the gui text label matches the source code!
Yes, and for a bit of thrill how about bitcoin auction? The proceeds may go to the developers of official bitcoin client who will have to do the actual coding.