5 ms·

To become a medium of exchange, it needs to become a unit of account. That will happen as it's value stabilises, and that will only happen once it's proved itse

by npoc 9mo ago

To become a medium of exchange, it needs to become a unit of account. That will happen as it's value stabilises, and that will only happen once it's proved itself as a store of value. What if Henry Ford evisaged his Model T being used as a temporary alternative for when your horse is unwell? Or a fairground ride? Bitcoin is what it is. > And what is the incentive to loan money in your system? Interest - the age-old solution. Offer me interest that both compensates me for not having use of my money and for the risk of getting it back, and we have a deal.

immibis 9mo ago
Value can only stabilise if there's either someone in charge adjusting the rate of printing to maintain a stable value. It cannot be done algorithmically as there's no way to determine the value from inside the system. Non-deflationary currencies encourage hoarding which leads to wild swings in value. Deflationary currencies do much better. Look at the price chart of BTC vs XMR.
- npoc 9mo ago
  It depends how you measure value. By stabilise I mean stops growing in value by 50%/yr with big short term swings of 80%. As it matures and gets close to it's ultimate value, volatility will naturally reduce. Once it is used as the unit of account, everything else will fluctuate in value relative to bitcoin, which has more stable fundamentals than anything else on earth (fixed/zero issuance, liquidity etc), but this will be decades in the future when it's dollar value will be 8 or 9 figures in today's money
  - immibis 9mo ago
    > By stabilise I mean stops growing in value by 50%/yr with big short term swings of 80%. Yeah, so that can't happen unless it's used for actual trade more than it's hoarded, which can't happen unless it's inflationary.
    - npoc 9mo ago
      Not at all. It naturally stabilises the closer it gets to its ultimate market cap. The more it stabilises the more it will be used as a medium of exchange.
      - immibis 9mo ago
        There is no evidence for this. When gold and gold-backed currency were used for trade, it fluctuated in value wildly and there were several depressions each decade. After centrally-issued fiat currency was introduced, it had a much more stable value, since it could be issued counter-cyclically.
        npoc 9mo ago
        How are you measuring the value of gold? How are you sure it's not the value of the quote asset that fluctuating wildly. If everything was priced in gold do you really think that the prices of everything would fluctuate wildly? For what reason? The only reason for any sudden changes in value of gold are due to demand, which is caused as people move their wealth out of fiat currencies which are collapsing in value.
        nutjob2 9mo ago
        The prices of things vary due to speculation as well as demand and supply. Gold is an industrial metal which has to be mined, thus making supply uncertain and exposed to the whims of miners. Central bank issued currencies are managed by varying the supply according to economic conditions, which has given economies much better stability as a result. There's nothing special about gold except that some people think that it's a panacea. It's not, it's still an industrial metal. "Fiat currencies which are collapsing in value" has no basis in fact. It's just mindless ideology at best and no better than a conspiracy theory.
        npoc 9mo ago
        Fiat currencies are collapsing in value. It's a fact. Price fiat in any hard asset like gold, real estate, bitcoin etc and it's obvious to see. The devaluation can be seen to be almost directly linked to the increase in the supply which approximately doubles each decade (no coincidence that real estate prices do the same). There is something very special about gold. It has the best monetary qualities of any physical substance. It is only bettered by bitcoin which essentially dematerialises gold - stripping away it's physical attributes that hinder it (portability, scarcity, verifiability, divisibility etc).

by npoc 9mo ago

immibis 9mo ago

Value can only stabilise if there's either someone in charge adjusting the rate of printing to maintain a stable value. It cannot be done algorithmically as there's no way to determine the value from inside the system. Non-deflationary currencies encourage hoarding which leads to wild swings in value. Deflationary currencies do much better. Look at the price chart of BTC vs XMR.

npoc 9mo ago
It depends how you measure value. By stabilise I mean stops growing in value by 50%/yr with big short term swings of 80%. As it matures and gets close to it's ultimate value, volatility will naturally reduce. Once it is used as the unit of account, everything else will fluctuate in value relative to bitcoin, which has more stable fundamentals than anything else on earth (fixed/zero issuance, liquidity etc), but this will be decades in the future when it's dollar value will be 8 or 9 figures in today's money
- immibis 9mo ago
  > By stabilise I mean stops growing in value by 50%/yr with big short term swings of 80%. Yeah, so that can't happen unless it's used for actual trade more than it's hoarded, which can't happen unless it's inflationary.
  - npoc 9mo ago
    Not at all. It naturally stabilises the closer it gets to its ultimate market cap. The more it stabilises the more it will be used as a medium of exchange.
    - immibis 9mo ago
      There is no evidence for this. When gold and gold-backed currency were used for trade, it fluctuated in value wildly and there were several depressions each decade. After centrally-issued fiat currency was introduced, it had a much more stable value, since it could be issued counter-cyclically.
      - npoc 9mo ago
        How are you measuring the value of gold? How are you sure it's not the value of the quote asset that fluctuating wildly. If everything was priced in gold do you really think that the prices of everything would fluctuate wildly? For what reason? The only reason for any sudden changes in value of gold are due to demand, which is caused as people move their wealth out of fiat currencies which are collapsing in value.
        nutjob2 9mo ago
        The prices of things vary due to speculation as well as demand and supply. Gold is an industrial metal which has to be mined, thus making supply uncertain and exposed to the whims of miners. Central bank issued currencies are managed by varying the supply according to economic conditions, which has given economies much better stability as a result. There's nothing special about gold except that some people think that it's a panacea. It's not, it's still an industrial metal. "Fiat currencies which are collapsing in value" has no basis in fact. It's just mindless ideology at best and no better than a conspiracy theory.
        npoc 9mo ago
        Fiat currencies are collapsing in value. It's a fact. Price fiat in any hard asset like gold, real estate, bitcoin etc and it's obvious to see. The devaluation can be seen to be almost directly linked to the increase in the supply which approximately doubles each decade (no coincidence that real estate prices do the same). There is something very special about gold. It has the best monetary qualities of any physical substance. It is only bettered by bitcoin which essentially dematerialises gold - stripping away it's physical attributes that hinder it (portability, scarcity, verifiability, divisibility etc).