5 ms·

Bitcoin is stable in reference to itself, just as USD is stable in reference to itself.

by adrianscott 8y ago

threeseed 8y ago
USD is also stable in reference to almost everything else. Bitcoin isn't.
- adrianscott 8y ago
  Would you consider USD also subject to a Keynesian Beauty Contest?
  - lordnacho 8y ago
    Yes, there's a 24/5 FX market where people decide what it's worth in relation to other currencies.
    - adrianscott 8y ago
      agreed
    - brokensegue 8y ago
      The prices fluctuate not due to mere speculation (on the beauty of currencies) but the need to convert currencies to run a company or live your life (e.g. you have dollars and you need to pay your supplier in yuan).
    - fjsolwmv 8y ago
      FX markets are open all night but close on weekends?
      - derekp7 8y ago
        To paraphrase Jimmy Buffet, It is always between 9:00 AM and 5:00 PM somewhere.
  - Terr_ 8y ago
    Along with most stocks. I think the key isn't whether something is/isn't a KBC, but how much other stuff exists that helps anchor it to some kind of objective reality.
  - JumpCrisscross 8y ago
    > Would you consider USD also subject to a Keynesian Beauty Contest? No. The Fed puts its thumb on the scales. We've known since about the 19th century that growing economies and fixed-supply currencies don't play well together.
    - gebregl 8y ago
      > We've known since about the 19th century that growing economies and fixed-supply currencies don't play well together. Can you give some examples? I don't know much about 19th century economics.
      - omegaham 8y ago
        The late 1800s had some rather severe panics that were caused by deflation - specifically, the Panics of 1873 and 1893. The problem with fixed-supply currencies is that if the economy is growing, and the supply of currency stays constant, currency is worth more. If your debt is measured in that currency, your debt just increased, and you might no longer be able to pay it. Large numbers of foreclosures are bad. Incidentally, one of the biggest political movements in response to these panics was a push to put the US onto the silver standard. Silver is more common, so it's easier for the supply of currency to increase (read: inflation) as the economy increases. A guy named William Jennings Bryan made a rather famous speech[1] about it. Today, we eschew a metallic standard entirely and just focus on achieving a constant rate of inflation. Zero inflation would be fine, but it's hard to achieve, and any missteps might lead to deflation. So, the Fed aims for 2% inflation - low enough for the value of the dollar to be pretty stable, but high enough that if the economy does something weird, we don't enter a deflationary state. [1] https://en.wikipedia.org/wiki/Cross_of_Gold_speech https://en.wikipedia.org/wiki/Cross_of_Gold_speech
- paulsutter 8y ago
  Bitcoin has been pretty stable around $6500 for the past month. And for six months has been way more stable than The Shitcoins (BTC has gone from 30% to 50+% of total market cap in that time). Humorous summary of price fluctuations since 2010: https://www.youtube.com/watch?v=XbZ8zDpX2Mg https://www.youtube.com/watch?v=XbZ8zDpX2Mg
  - buzzdenver 8y ago
    You're talking 6 months. Would you want to be paid in BTC for your full time job, or start a business that pays its employees that way?
    - mhluongo 8y ago
      Absolutely.
    - deleted 8y ago
      [deleted]
ummonk 8y ago
There is a powerful entity (the Fed) focused on keeping it stable in reference to consumer goods and services.
- craigc 8y ago
  Right, and how is that going for them? The average home cost around $3,400 in 1913 (when the FED was created), and today is around $200,000. And $1 is still worth $1.
  - rpearl 8y ago
    some amount of inflation is a desired property to have in a currency, and this result is for the most part the intended result
  - tedsanders 8y ago
    It's actually going very well for the US. Inflation has been been low and stable. The real economy is larger than it's ever been. Unemployment is very low. Out of all the countries and currencies on Earth over the past 100 years, the US and its dollar have had a better track record than almost any other. A few corrections to some possible misconceptions: (1) Fed is short for Federal Reserve. It's not an acronym. (2) The goal of the Fed is not 0% inflation. Because downside risks are worse than upside risks, the Fed's explicit long-term target is 2% (3) House prices aren't great to use as a metric of inflation. A house built today is far, far better than house built in 1913. According to the consumer price index, $3,400 in 1913 has the rough buying power of $88,000 today. https://www.bls.gov/cpi/ https://www.bls.gov/cpi/ In my opinion, if you want to make a serious argument against the Fed, you should (a) do more work than rhetorically asking how the past century has gone for us, and (b) at least be familiar enough with the thing to spell its name correctly.
    - craigc 8y ago
      Thanks. I am well aware of all the things you pointed out. I think we just have a different opinion of what stable is or should be. I think a currency that has $1.00 worth of purchasing power when I am given it should not lose 99% of its value over the next 100 years if I do not spend it. I am aware that that is impossible due to inflation, and that is why things like gold are much better stores of value than the dollar.
AnimalMuppet 8y ago
True, but not relevant. The dollar is relatively stable as measured by everything-in-the-entire-economy-that-is-not-dollars. Bitcoin? Not at all. "When they measure themselves by themselves and compare themselves with themselves, they are not wise." - 2 Corinthians 10:12 (NIV)
joering2 8y ago
This comparision is empty because anything exchange into the same results with the same. in other words: nobody exachange dollar into dollar unless they are not sound-minded. Fiat currency is at its best second degree KBC because other countries decide on accepting or rejecting US economical indicators by temporarily betting on their short term future and set currency exchange point for the next 24 hours or so. Nobody buys US dollar because american flag is pretty or english is second broadest language in the world or some other “pretty face” indicator, as currency exhange dollar versus everything for the last 25 years clearly shows USD strenghtening +500% and weakening even 50% all the time. No, Feds do not decide on this beauty contest. May be suprise to you but only 20% of printed dollar remains in usa. 80% is being shipped out for all sorts of purposes such as balancing countries oil wallets (aka petrodolar) to aiding other countries ending on fact that many countries prefer intra-use of greenbacks to its own currency. So Feds at its best control pretty face of dollar on its local playground aka USA, but in reality they dont because again dollar strength comes from evonomical indicators, not from how much feds prints.
sdmadf2834 8y ago
So what you're saying is that 1 BTC = 1 BTC?

Bitcoin is stable in reference to itself, just as USD is stable in reference to itself.

threeseed 8y ago

USD is also stable in reference to almost everything else. Bitcoin isn't.

adrianscott 8y ago
Would you consider USD also subject to a Keynesian Beauty Contest?
- lordnacho 8y ago
  Yes, there's a 24/5 FX market where people decide what it's worth in relation to other currencies.
  - adrianscott 8y ago
    agreed
  - brokensegue 8y ago
    The prices fluctuate not due to mere speculation (on the beauty of currencies) but the need to convert currencies to run a company or live your life (e.g. you have dollars and you need to pay your supplier in yuan).
  - fjsolwmv 8y ago
    FX markets are open all night but close on weekends?
    - derekp7 8y ago
      To paraphrase Jimmy Buffet, It is always between 9:00 AM and 5:00 PM somewhere.
- Terr_ 8y ago
  Along with most stocks. I think the key isn't whether something is/isn't a KBC, but how much other stuff exists that helps anchor it to some kind of objective reality.
- JumpCrisscross 8y ago
  > Would you consider USD also subject to a Keynesian Beauty Contest? No. The Fed puts its thumb on the scales. We've known since about the 19th century that growing economies and fixed-supply currencies don't play well together.
  - gebregl 8y ago
    > We've known since about the 19th century that growing economies and fixed-supply currencies don't play well together. Can you give some examples? I don't know much about 19th century economics.
    - omegaham 8y ago
      The late 1800s had some rather severe panics that were caused by deflation - specifically, the Panics of 1873 and 1893. The problem with fixed-supply currencies is that if the economy is growing, and the supply of currency stays constant, currency is worth more. If your debt is measured in that currency, your debt just increased, and you might no longer be able to pay it. Large numbers of foreclosures are bad. Incidentally, one of the biggest political movements in response to these panics was a push to put the US onto the silver standard. Silver is more common, so it's easier for the supply of currency to increase (read: inflation) as the economy increases. A guy named William Jennings Bryan made a rather famous speech[1] about it. Today, we eschew a metallic standard entirely and just focus on achieving a constant rate of inflation. Zero inflation would be fine, but it's hard to achieve, and any missteps might lead to deflation. So, the Fed aims for 2% inflation - low enough for the value of the dollar to be pretty stable, but high enough that if the economy does something weird, we don't enter a deflationary state. [1] https://en.wikipedia.org/wiki/Cross_of_Gold_speech https://en.wikipedia.org/wiki/Cross_of_Gold_speech
paulsutter 8y ago
Bitcoin has been pretty stable around $6500 for the past month. And for six months has been way more stable than The Shitcoins (BTC has gone from 30% to 50+% of total market cap in that time). Humorous summary of price fluctuations since 2010: https://www.youtube.com/watch?v=XbZ8zDpX2Mg https://www.youtube.com/watch?v=XbZ8zDpX2Mg
- buzzdenver 8y ago
  You're talking 6 months. Would you want to be paid in BTC for your full time job, or start a business that pays its employees that way?
  - mhluongo 8y ago
    Absolutely.
  - deleted 8y ago
    [deleted]

ummonk 8y ago

There is a powerful entity (the Fed) focused on keeping it stable in reference to consumer goods and services.

craigc 8y ago
Right, and how is that going for them? The average home cost around $3,400 in 1913 (when the FED was created), and today is around $200,000. And $1 is still worth $1.
- rpearl 8y ago
  some amount of inflation is a desired property to have in a currency, and this result is for the most part the intended result
- tedsanders 8y ago
  It's actually going very well for the US. Inflation has been been low and stable. The real economy is larger than it's ever been. Unemployment is very low. Out of all the countries and currencies on Earth over the past 100 years, the US and its dollar have had a better track record than almost any other. A few corrections to some possible misconceptions: (1) Fed is short for Federal Reserve. It's not an acronym. (2) The goal of the Fed is not 0% inflation. Because downside risks are worse than upside risks, the Fed's explicit long-term target is 2% (3) House prices aren't great to use as a metric of inflation. A house built today is far, far better than house built in 1913. According to the consumer price index, $3,400 in 1913 has the rough buying power of $88,000 today. https://www.bls.gov/cpi/ https://www.bls.gov/cpi/ In my opinion, if you want to make a serious argument against the Fed, you should (a) do more work than rhetorically asking how the past century has gone for us, and (b) at least be familiar enough with the thing to spell its name correctly.
  - craigc 8y ago
    Thanks. I am well aware of all the things you pointed out. I think we just have a different opinion of what stable is or should be. I think a currency that has $1.00 worth of purchasing power when I am given it should not lose 99% of its value over the next 100 years if I do not spend it. I am aware that that is impossible due to inflation, and that is why things like gold are much better stores of value than the dollar.

AnimalMuppet 8y ago

True, but not relevant. The dollar is relatively stable as measured by everything-in-the-entire-economy-that-is-not-dollars. Bitcoin? Not at all. "When they measure themselves by themselves and compare themselves with themselves, they are not wise." - 2 Corinthians 10:12 (NIV)

joering2 8y ago

This comparision is empty because anything exchange into the same results with the same. in other words: nobody exachange dollar into dollar unless they are not sound-minded. Fiat currency is at its best second degree KBC because other countries decide on accepting or rejecting US economical indicators by temporarily betting on their short term future and set currency exchange point for the next 24 hours or so. Nobody buys US dollar because american flag is pretty or english is second broadest language in the world or some other “pretty face” indicator, as currency exhange dollar versus everything for the last 25 years clearly shows USD strenghtening +500% and weakening even 50% all the time. No, Feds do not decide on this beauty contest. May be suprise to you but only 20% of printed dollar remains in usa. 80% is being shipped out for all sorts of purposes such as balancing countries oil wallets (aka petrodolar) to aiding other countries ending on fact that many countries prefer intra-use of greenbacks to its own currency. So Feds at its best control pretty face of dollar on its local playground aka USA, but in reality they dont because again dollar strength comes from evonomical indicators, not from how much feds prints.

sdmadf2834 8y ago

So what you're saying is that 1 BTC = 1 BTC?