I'm having an argument of facebook, and the forum is a better place to write, plus might be of interest to others. The jumping off point was an article that almost literally says "huh, an electricity backed currency would be interesting": https://medium.com/@crypto_future/elect ... .ovpv1j79i
Comments:
young and angry wrote:Bitcoin/RBE (Venus project) /Gold standard operate from the same basic principle : Efficiency of distribution, local sustainability, a finite measurement of economic value based on either a closed algorithm or /and a set number or resources/energy. The big question is, how the hell did the world dive into the panic pyramid scheme of neo-keynesianism? Even Marx and Mises understood macroeconomy better and from a more scientific positioning.
yours truly wrote:Becuase it works. fixed resource like gold standard hands the entire economy on a plate to who ever has the most to start with. it's a terrible system
young and angry and pompous wrote:Which is why the trade of resources must take place efficiently. I didnt say I support the GS. It is irrelevant now. However look at Bitcoin or RBE.
RBE by no means hands money to someone rich as it is the removal of money. The point was that the current keynesian economy (no, it does not work and never worked) is based on a pyramid game of value. You cannot get more physical resource value by just pretending or printing money.
What is the nature of the debt problems in the world, if it has nothing to do with former inflation?
Productivity can be enhanced by technological advance and less bureacracy. Which means less growth is needed for more outcome.
Keynesian economy however says that the productivity can be *pretended* to provide more ,if the banks or the state hopes for the growth and consumption+taxes to balance the budgets in a future. What if that does not happen? Iceland 2007-08... Greece...
How are you going to secure that salaries increase as much as cost and inflation together? Both cost for all sectors in most countries together with taxes and lost money value to resource amount (inflation) have been the general issue of broken economies. Later debts and low interest rate becomes the panic solution.
Salaries keeping track with increased cost and higher inflation, has only been done in short whiles at a time, provided that the public consumption is high and the industrial growth extreme (giving pollution issues, unbalanced economies as debts get involved, sudden unemployments for many people etc) .
Should the economy be based on idealism or physics? Communism and neokeynesianism (US/EU capitalism) is highly based on everything else than science. Wishful thinking.
If the economy however is based on the actual laws of physics and mathematical logic, it would require that savings, stable value of the currency (or money replaced with a credit system for how you provide something to the community) , merged with technical efficiency and local responsibility/local cooperations (practical) are combined.
A stable and sensible economy system in the long run would always anchor resource "value" in either fully stable money or in extreme efficiency of distribution.
"Aid, trade, green technology and peace." - Hans Rosling.
"Welcome to SDN, where we can't see the forest because walking into trees repeatedly feels good, bro." - Mr Coffee
I hate to say it, but you're having a conversation with a crazy person.
There's no profit in having conversations with crazy people except in as far as you are required to by your job, so don't bother doing it.
You won't convince a bitcoin true believer that their cryptocurrency is essentially a giant waste of time as a currency, is as valuable to anyone who isn't a true believer as sweetie wrappers, and its markets are immensely vulnerable to ancient trader manipulations let alone modern electronic trading algorithms. (And, indeed, the alleged value of bitcoin was massively inflated by known trading fraud that nobody cared about or noticed until the wheels fell off because the people who valued bitcoin weren't financial sector wizards, if they were they'd have had actual money to play with not pretend money.)
Oh I know, but i have no willlpower in these things.
Ok. There's just so much that's misguided or overly simplistic here I'm going to have to do this point by point.
Which is why the trade of resources must take place efficiently. I didnt say I support the GS. It is irrelevant now. However look at Bitcoin or RBE.
>> Bitcoin and RBE are interesting for now only in that anyone can mine bit coins and then trade them for a more widely accepted currency. It represents a transfer of buying power from the person buying bitcoins (be they a corrupt official, a drug dealer or just an enthusiast) to the person mining bitcoins (eg my friend in Vietnam). Once the bitcoin algorithim is tapped out, and there are no more bit coins, you have a currency with rampant specualtion and inflation. The latter becuase coins/dust will be steadily dropping out of circulation as people save, loose or forget about their wallets. If the demand for bitcoins remains constant and supply dwindles, the value of each bitcoin rises. Then you get speculators who want to buy a bitcoin now hoping it will be worth more in the future. This drives up prices in the now and could result in a bubble. We'll come back to that.
RBE by no means hands money to someone rich as it is the removal of money. The point was that the current keynesian economy (no, it does not work and never worked) is based on a pyramid game of value. You cannot get more physical resource value by just pretending or printing money.
What is the nature of the debt problems in the world, if it has nothing to do with former inflation?
>> ok. RBE stands here for Resource Based Economy, something the Venus project mentions a lot, but dosen't ever really define. The Venus project website text is generally a hot mess, so I'm not going to touch it apart from snigger at their page on construction technology. You seem to have a fundamental misunderstanding of Keynesian Economics. You do not get more physical resources by printing money. You just get more money. As a gross simplification, a recession is not caused by a lack of resources. A recession is a expecation issue leading to a liquidity problem. Money is like the oil that allows the conveyor belts of resources to move. People like to spend money to get stuff, but they also like to save some incase the future supply is not as good. In the early point of a recession, everyone become worried about losing a contract or losing their jobs, so they try to save more money, spending less, which means worse busissness/pay for someone else who then worries the future will be worse and saves more. It's a vicious circle. A biological metaphor is when you try to loose weight by eating very little, the body thinks you are starving and dedicates more of the small food intake to fatty energy storage.
Productivity can be enhanced by technological advance and less bureacracy. Which means less growth is needed for more outcome.
Keynesian economy however says that the productivity can be *pretended* to provide more ,if the banks or the state hopes for the growth and consumption+taxes to balance the budgets in a future. What if that does not happen? Iceland 2007-08... Greece...
>> So you accept that things can become more productive over time. You just don't like people making loans in the now assuming that they will be able to pay them back in the future? There is always a risk the loan will fail, that's why a lender charges interest above the inflation rate. Averaged over many loans, they will not lose money overall and will make some profit, giving them a reason to offer to the loans in the first place. Microloans as a system, when well managed and sensible, have worked really well at bringing people in developing countries out of poverty. Or do you think people should only be able to live in a house when they have saved up the full value over thirty years, rather than getting a mortgage?
How are you going to secure that salaries increase as much as cost and inflation together? Both cost for all sectors in most countries together with taxes and lost money value to resource amount (inflation) have been the general issue of broken economies. Later debts and low interest rate becomes the panic solution.
>> I'm not sure i understand what you mean here. Define broken economies for a start.
Salaries keeping track with increased cost and higher inflation, has only been done in short whiles at a time, provided that the public consumption is high and the industrial growth extreme (giving pollution issues, unbalanced economies as debts get involved, sudden unemployments for many people etc) .
>> Economic growth and carbon emissions are decoupling, thanks mostly to work done by China. The risk of sudden unemployment due to technological change will not change under bitocoin/ RBE or the gold standard, since it it driven by technological change.
I'm not sure what you mean by unbalanced economies. Do you mean trade balance or do you mean over-reliance on a single good?
Should the economy be based on idealism or physics? Communism and neokeynesianism (US/EU capitalism) is highly based on everything else than science. Wishful thinking. If the economy however is based on the actual laws of physics and mathematical logic, it would require that savings, stable value of the currency (or money replaced with a credit system for how you provide something to the community) , merged with technical efficiency and local responsibility/local cooperations (practical) are combined. A stable and sensible economy system in the long run would always anchor resource "value" in either fully stable money or in extreme efficiency of distribution.
>> In physics, can you borrow energy from the future and pay it back later? How does physics predict what method of transport I take to work?
There is nothing in physics that states a currency should be stable. Most things in physics are not stable.
You do realise that actual ecomomics and game theory are both already highly mathematical topics?
You do realise that your last sentance also applies to standard model capitalism? For standard fungible goods, in the long run prices converge to the lowest point where supply is still met. This occurs at maximum efficiency of distribution. The major thrust of a lot of work in ecomoics at the moment is towards two things: 1) whether that long term is ever actually reached, since technological development, natural disasters ect keep disrupting it and 2) The ways in which human behaviour is predictably irrational. Assuming perfectly logical people does not reflect the real world well, and neither does the 'enviromental conditioning' of the Venus Project.
"Aid, trade, green technology and peace." - Hans Rosling.
"Welcome to SDN, where we can't see the forest because walking into trees repeatedly feels good, bro." - Mr Coffee
Vendetta wrote:I hate to say it, but you're having a conversation with a crazy person.
There's no profit in having conversations with crazy people except in as far as you are required to by your job, so don't bother doing it.
You won't convince a bitcoin true believer that their cryptocurrency is essentially a giant waste of time as a currency, is as valuable to anyone who isn't a true believer as sweetie wrappers, and its markets are immensely vulnerable to ancient trader manipulations let alone modern electronic trading algorithms. (And, indeed, the alleged value of bitcoin was massively inflated by known trading fraud that nobody cared about or noticed until the wheels fell off because the people who valued bitcoin weren't financial sector wizards, if they were they'd have had actual money to play with not pretend money.)
Quick example, I'm currently researching something related to Monero, a really weird cryptocurrency with stronger anonymity garuntees than Bitcoin. It's patently obvious that a bunch of people are doing a giant pump and dump scam on the currency and making off with around 10K USD a week while wasting hundreds of peoples time and money.
Brotherhood of the Bear | HAB | Mess | SDnet archivist |
Bitcoin is currently maintaining value because it is a cheap and (mostly, prior to recent developer/political issues) effective payment system for cases where the existing infrastructure was very expensive, unreliable, or too likely to cause legal complications. Note that government-mandated anti-fraud measures are a major reason why conventional financial transfers are expensive; it is not as if there is a lack of competition, although in some cases legacy costs are an issue. The store-of-value aspect of Bitcoin is not very relevant now that it's out of the speculative boom phase.
That said I fail to see why you are dragging bits of some random internet conversation you're having onto this forum. If you can't get the other participant to come here then it is adding nothing over just posting the link.
After a bit of scrapping he just started posting youtube videos of 'economists'. I did invite him here, but I'll be surprised if he comes.
"Aid, trade, green technology and peace." - Hans Rosling.
"Welcome to SDN, where we can't see the forest because walking into trees repeatedly feels good, bro." - Mr Coffee
While it seems unlikely the facebook guy will come over here, I would be interested in discussing the psychology or beliefs that give rise to gold standard/crypto-currency diehards.
What I've gather from my very casual and random encounters, they seem to think that gold has some sort of intrinsic, objective monetary value to the universe. Is that all there is to it or am I overlooking something?
they seem to think that gold has some sort of intrinsic, objective monetary value to the universe. Is that all there is to it or am I overlooking something?
No. They think that gold is not subject to manipulation and control by central banks and/or state monetary policy, and thus is theoretically a stable store of value when the government decides to roll the presses to get rid of debt and we all wind up wiping our asses with trillion dollar bills. Or something like that.
In the event that the content of the above post is factually or logically flawed, I was Trolling All Along.
"Essentially, all models are wrong, but some are useful." - George Box
Darmalus wrote:What I've gather from my very casual and random encounters, they seem to think that gold has some sort of intrinsic, objective monetary value to the universe. Is that all there is to it or am I overlooking something?
Nobody thinks that*. You are not 'overlooking something', you are just too lazy to do even 5 minutes of research.
* Excepting a tiny minority of religious nuts, but if you look hard enough you can find religious nuts fervently asserting almost any proposition.
1. "Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head."
2. "The problem with commodities is that you are betting on what someone else would pay for them in six months. The commodity itself isn't going to do anything for you….it is an entirely different game to buy a lump of something and hope that somebody else pays you more for that lump two years from now than it is to buy something that you expect to produce income for you over time."
3. "Gold is a way of going long on fear, and it has been a pretty good way of going long on fear from time to time. But you really have to hope people become more afraid in a year or two years than they are now. And if they become more afraid you make money, if they become less afraid you lose money, but the gold itself doesn't produce anything."
4. "I will say this about gold. If you took all the gold in the world, it would roughly make a cube 67 feet on a side…Now for that same cube of gold, it would be worth at today's market prices about $7 trillion – that's probably about a third of the value of all the stocks in the United States…For $7 trillion…you could have all the farmland in the United States, you could have about seven Exxon Mobils (NYSE:XOM) and you could have a trillion dollars of walking-around money…And if you offered me the choice of looking at some 67 foot cube of gold and looking at it all day, and you know me touching it and fondling it occasionally…Call me crazy, but I'll take the farmland and the Exxon Mobils."
5. "The major asset in this category is gold, currently a huge favorite of investors who fear almost all other assets, especially paper money (of whose value, as noted, they are right to be fearful). Gold, however, has two significant shortcomings, being neither of much use nor procreative. True, gold has some industrial and decorative utility, but the demand for these purposes is both limited and incapable of soaking up new production. Meanwhile, if you own one ounce of gold for an eternity, you will still own one ounce at its end."
6. "What motivates most gold purchasers is their belief that the ranks of the fearful will grow. During the past decade that belief has proved correct. Beyond that, the rising price has on its own generated additional buying enthusiasm, attracting purchasers who see the rise as validating an investment thesis. As 'bandwagon' investors join any party, they create their own truth - for a while."
7. "I have no views as to where it will be, but the one thing I can tell you is it won't do anything between now and then except look at you. Whereas, you know, Coca-Cola (NYSE:KO) will be making money, and I think Wells Fargo (NYSE:WFC) will be making a lot of money and there will be a lot - and it's a lot - it's a lot better to have a goose that keeps laying eggs than a goose that just sits there and eats insurance and storage and a few things like that."
Those pretty much can be applied to Bitcoin too. Just replace holes dug in Africa with electricity and computer that could be used for something productive.
young and angry wrote:Bitcoin/RBE (Venus project) /Gold standard operate from the same basic principle : Efficiency of distribution, local sustainability, a finite measurement of economic value based on either a closed algorithm or /and a set number or resources/energy. The big question is, how the hell did the world dive into the panic pyramid scheme of neo-keynesianism? Even Marx and Mises understood macroeconomy better and from a more scientific positioning.
Maybe you could ask him which of those three (Mises, Marx and Keynes) ended life as millionaire from stock investment and which lived of tenure or handouts from friends. Also mention Buffet.
madd0ct0r wrote:Which is why the trade of resources must take place efficiently. I didnt say I support the GS. It is irrelevant now. However look at Bitcoin or RBE.
>> Bitcoin and RBE are interesting for now only in that anyone can mine bit coins and then trade them for a more widely accepted currency. It represents a transfer of buying power from the person buying bitcoins (be they a corrupt official, a drug dealer or just an enthusiast) to the person mining bitcoins (eg my friend in Vietnam). Once the bitcoin algorithim is tapped out, and there are no more bit coins, you have a currency with rampant specualtion and inflation. The latter becuase coins/dust will be steadily dropping out of circulation as people save, loose or forget about their wallets. If the demand for bitcoins remains constant and supply dwindles, the value of each bitcoin rises. Then you get speculators who want to buy a bitcoin now hoping it will be worth more in the future. This drives up prices in the now and could result in a bubble. We'll come back to that.
I'm not sure if this will lead in bubbles. Although the term is hard to define for an economist. But the problem is, that a fixed amount of currency leads to deflation, not inflation. It makes more sense to keep your currency and not invest it into the real economy. The economy will reach an upper limit of productivity, because only the most profitable investments will be made will private investment decays, until the economy contracts enough that investment will be profitable again.
What I've gather from my very casual and random encounters, they seem to think that gold has some sort of intrinsic, objective monetary value to the universe. Is that all there is to it or am I overlooking something?
For people advocating for gold standard today, it has to do with the appeal of commodity currency (this is money because the money itself is valuable) versus fiat currency (this is money because xy nation/government says it is valuable). I think it has to do with the idea that gold amount is a physical reality that can be checked and thus somehow less ,or not, subject to problems to the trust that form the foundation of economies.
Pratchett actually made a book about this, pointing out that even if a currency is backed by gold you are then already running on trust that the gold is there and as long as the trust is there the currency will work even if there is no actual gold. Which is how money works pretty much and I would not be surprised is how BitCoin works.
Credo!
Chat with me on Skype if you want to talk about writing, ideas or if you want a test-reader! PM for address.
Deflation is also wonderful for lenders but absolutely horrible for borrowers. Lenders wouldn't do away with interest on loans just because there was deflation going on. They'd look and go "Hey, I can keep the interest on here and see the value of each dollar rise!"
And cryptocurrency is wholly reliant on having electricity. In a blackout situation, even just 24 hours, no money circulation can take place. Also, it is even more imaginary than fiat money.
In a case of economic collapse nobody would give a damn about that shiny yellow rock we call gold. Anything that caused fiat currency to become worthless would also cause gold to be worthless. I think the thing that goldbugs and cryptocurrency cuckoos tend to neglect is that every currency possible relies on society at large agreeing something with no inherent value is actually valuable. If they really did give a shit about something having real, tangible value they'd want to go all the way back to the barter system, where you could trade sheep for food or other similar exchanges. Which... would not work in this day and age, since many things are an exchange of concepts.
Sig images are for people who aren't fucking lazy.
Communism and neokeynesianism (US/EU capitalism) is highly based on everything else than science.
I'm not even sure what this is supposed to mean.
If the economy however is based on the actual laws of physics...
Then it can be anything and everything. Laws of physics as we know them only prohibit very few things. FTL, for example.
A stable and sensible economy system in the long run would always anchor resource "value" in either fully stable money or in extreme efficiency of distribution.
"Efficiency in distribution"? Yeah, right. That's a meaningless phrase.
Lì ci sono chiese, macerie, moschee e questure, lì frontiere, prezzi inaccessibile e freddure
Lì paludi, minacce, cecchini coi fucili, documenti, file notturne e clandestini
Qui incontri, lotte, passi sincronizzati, colori, capannelli non autorizzati,
Uccelli migratori, reti, informazioni, piazze di Tutti i like pazze di passioni...
...La tranquillità è importante ma la libertà è tutto!
Vendetta wrote:I hate to say it, but you're having a conversation with a crazy person.
There's no profit in having conversations with crazy people except in as far as you are required to by your job, so don't bother doing it.
You won't convince a bitcoin true believer that their cryptocurrency is essentially a giant waste of time as a currency, is as valuable to anyone who isn't a true believer as sweetie wrappers, and its markets are immensely vulnerable to ancient trader manipulations let alone modern electronic trading algorithms. (And, indeed, the alleged value of bitcoin was massively inflated by known trading fraud that nobody cared about or noticed until the wheels fell off because the people who valued bitcoin weren't financial sector wizards, if they were they'd have had actual money to play with not pretend money.)
Vendetta was right. Oh god was he right.
It did spark enough interest for me to look into electricity backed monetry systems, but it's pretty quickly apparent why they haven't been adopted. They have all of the disadvantages of fiat money + negative feedback loops that makes dealing with recessions harder + limited storage leading to huge volatility + distracting electricity from doing what it is good for.
"Aid, trade, green technology and peace." - Hans Rosling.
"Welcome to SDN, where we can't see the forest because walking into trees repeatedly feels good, bro." - Mr Coffee
madd0ct0r wrote:They have all of the disadvantages of fiat money + negative feedback loops that makes dealing with recessions harder + limited storage leading to huge volatility + distracting electricity from doing what it is good for.
The wasting electricity thing (and worse, wasting a lot of money on design and fab of custom hardware useless for anything else) is a technical flaw specific to Bitcoin. I can't really blame the original designer as it was experimental software that they probably didn't expect to scale to anything like the current network. The problem is that the distribution function for new currency units is a lottery where you get one ticket per chunk of arbitrary calculations you can run. This made sense for an experiment that was trying to reward a small group of hobbyists for contributing their personal PCs and the odd spare server to the network. It eventually became a red queen's race of pouring money down a hole.
The actual crypto requirements for blockchain payment verification are relatively light (on modern hardware, with modern fixes to the original Bitcoin design). Literally any other initial distribution function can be substituted for 'amount of computer power controlled'. Even for currencies that retain this startup concept, using a calculation that pretty much requires a general purpose CPU and isn't so susceptible to ASICs at least ensures that (a) the miner group isn't tiered and (b) people are just buying normal servers, which can be repurposed for other things, not custom hardware that becomes a paperweight within a year as the cryptocurrency landscape changes.
I am not a cryptocurrency hobbyist or investor myself, but I do get asked about it in a professional context; many banks have been doing internal studies on both Bitcoin and blockchain technology in general. I think some of it is 'can we make money here' and some of it is 'know your enemy'.
Yeah, it's starting to make rumbles in the wife's work too. Interesting for me on the NGO side - one vietnamese friend was earning $1000 a month from bitcoin at one point, which is about half the pay of a fully qualified engineer. The startup phase presents an interesting opportunity for wealth transfer. The vietnamese inflation rate of about 20% per anumn, and the goverment controls on 'standard' currency transactions was an interesting confunding factor, but i believe he sold mostly to american-get-rish-quickers.
But my comment about electricity backed currency was more literal: "I promise to pay the bearer on demand 1 MegaWatt at 220 volts", sort of thing
"Aid, trade, green technology and peace." - Hans Rosling.
"Welcome to SDN, where we can't see the forest because walking into trees repeatedly feels good, bro." - Mr Coffee
madd0ct0r wrote:But my comment about electricity backed currency was more literal: "I promise to pay the bearer on demand 1 MegaWatt at 220 volts", sort of thing
That's just a unit of energy, and I like my power the way I like my women. Uninterrupted
"Aid, trade, green technology and peace." - Hans Rosling.
"Welcome to SDN, where we can't see the forest because walking into trees repeatedly feels good, bro." - Mr Coffee
Bitcoins are useful...
... as in investment, not as a currency. But frankly, I would rather investors were messing around with bitcoins than they were messing with the London house market. Or indeed gold for that matter. Gold being used for investment is a bad thing because it drives up the price of gold so it is more expensive to use it in computers and astronaut helmets and such.
Starglider wrote:
madd0ct0r wrote:They have all of the disadvantages of fiat money + negative feedback loops that makes dealing with recessions harder + limited storage leading to huge volatility + distracting electricity from doing what it is good for.
The wasting electricity thing (and worse, wasting a lot of money on design and fab of custom hardware useless for anything else) is a technical flaw specific to Bitcoin. I can't really blame the original designer as it was experimental software that they probably didn't expect to scale to anything like the current network. The problem is that the distribution function for new currency units is a lottery where you get one ticket per chunk of arbitrary calculations you can run. This made sense for an experiment that was trying to reward a small group of hobbyists for contributing their personal PCs and the odd spare server to the network. It eventually became a red queen's race of pouring money down a hole.
The actual crypto requirements for blockchain payment verification are relatively light (on modern hardware, with modern fixes to the original Bitcoin design). Literally any other initial distribution function can be substituted for 'amount of computer power controlled'. Even for currencies that retain this startup concept, using a calculation that pretty much requires a general purpose CPU and isn't so susceptible to ASICs at least ensures that (a) the miner group isn't tiered and (b) people are just buying normal servers, which can be repurposed for other things, not custom hardware that becomes a paperweight within a year as the cryptocurrency landscape changes.
I am not a cryptocurrency hobbyist or investor myself, but I do get asked about it in a professional context; many banks have been doing internal studies on both Bitcoin and blockchain technology in general. I think some of it is 'can we make money here' and some of it is 'know your enemy'.
I'd agree it may not be the most efficient use of resources, but it is misleading to call their efforts completely useless. It drives innovation in computing and this is a good thing. Also, bitcoin miners often use the heat their computers generate to heat their homes, so it is misleading to quote an energy figure and say it is all wasted, what is wasted is the inefficacies of grid electricity and when they run their bitcoin machines in summer.
