Main Area and Open Discussion > Living Room

Bitcoin theft causes Bitfloor exchange to go offline

<< < (4/5) > >>

Paul Keith:
Deflation is a horrible thing. It sounds great when you first hear about it, but think about it: Deflation means that by simply sitting on a bitcoin doing NOTHING, the value of your savings increases. What if everybody did this? Believing that a deflationary economy could work is similar as believing in perpetual motion. Though, I admit that it is very intriguing to dream about outwitting nature or math.

A functional economy must favor those that take action more than those, who don't. That is why a mild, predictable inflation is necessary. Deflationary economy favors hoarders instead of producers of goods and services. In time, deflation drives active entities out of market and therefore the bitcoins in their current form cannot become widespread. They would kill every industry segment that would depend on them.

It may not sound that way, but I am a big fan of decentralized digital currencies for all the reasons mentioned by Renegade. I just don't believe in the current Bitcoin system.
-vlastimil (September 06, 2012, 10:34 AM)
--- End quote ---

Sorry was posting a message when this post was written.

I think this warrants a separate topic. Digital currency has a longer life span than actual currency. Almost everything digital is. So long as the process is rolling, the currency exists. There's no deadline for the mine.

Yes, deflation is still horrible but every digital concept does nothing. It's just parked there.

The only time it moves is when it cannot be maintained anymore and shuts down like a website or it goes the opposite way and someone finds a way to make it work...only then is it an actual economy with industry segment depending on them, yes?

40hz:
Regardless of my political feelings, or love of new ways to do old things, the number of times  BitCoin exchanges get targeted and hacked doesn't give me the warm fuzzies. Especially considering these aren't insured accounts.

I think it's only going to be a matter of time before regulators are forced to shut BitCoin down. There's too much at stake to allow it to continue with its current track record for insufficient security..

f0dder:
I think it's only going to be a matter of time before regulators are forced to shut BitCoin down. There's too much at stake to allow it to continue with its current track record for insufficient security..-40hz (September 06, 2012, 01:22 PM)
--- End quote ---
I doubt it's going to be shut down before it poses a serious threat to the current money model - but you can bet it'd be shut down with extreme prejudice as soon as it does.

vlastimil:
About shutting it down - I will not say that it is impossible, but with Bitcoin being a distributed service, it would require extreme technical and political measures. Simply shutting down a single server or seizing a domain name would not do it. I will go as far as saying that the easiest way to shut Bitcoin down is via social engineering - convincing all the people using it that it is irrelevant.

The web site that was hacked is just an easily replaceable service running on top of the Bitcoin protocol.

TaoPhoenix:
A functional economy must favor those that take action more than those, who don't. That is why a mild, predictable inflation is necessary. Deflationary economy favors hoarders instead of producers of goods and services. In time, deflation drives active entities out of market and therefore the bitcoins in their current form cannot become widespread. They would kill every industry segment that would depend on them.
-vlastimil (September 06, 2012, 10:34 AM)
--- End quote ---

I'm not so sure that inflation is a good thing either. It might just be the lesser of two evils. (* See Humor Thread for a cheapo joke!)
The way I see inflation, the "middle class" gets jammed because at the personal side "revenue" (aka your wages) is someone's judgement with a game theory low-level tendency to go DOWN. Expenses are Other People's Revenue with a "market gamble" to push UP. So in MicroEconomics, there are a series of ideas around "counter-intuitive demand curves". "As the price of a core Product And/Or Service go up, the proportion of the consumer's money spent on them goes UP." (You'd think it should go down, like most discretionary offerings.) The key word is proportion. The famous examples are car gas and rent. When trying to stay alive gets more expensive, you have no room left to do anything fun. And when any consumer ever asks in frustration why this is, the business managers all whine "prices are always rising." Consumer responds "But you're paying me less." "Yeah, well, gotta keep costs down, blah blah".

(I said "Low Level" game theory up there, because at the more advanced stages, you get things like a town boycott can shut down a store, or the mayor can influence wages, or in a really hard business you get the "quality of worker you pay for", etc. (Outsourcing Customer service, etc.))

So while difficult, maybe an exactly level economy might be best on paper. A true deflationary economy is bad news, because a ton of the economy runs on "momentum" and when you lose the "critical mass" you get a mess like Detroit. However an interesting thing, while a bit tricky at first, is a currency adjustment which is simply math on the currency, but the actual GDP etc of the country is the same.

Navigation

[0] Message Index

[#] Next page

[*] Previous page