An insight on Bitcoin

[Elegiac]

A metal is not digital to begin with, and you can divide it like you can with a digital currency.

You do realise they were not actually physically dividing the metal to create new dollars, right?

You're mixing up + and /. Sorry, this is not hard to understand. Write things in excel and calculate, I don't know.

Do you know what the term "pegged" means as it refers to currency?

It is a problem which has lead to the consequence in the current day, look at how many workers are poor and are paid so little.

That is entirely a function of lax labor regulation and the inherent imbalance of power that mandatory participation in the labor market creates, not because of fiat.

[Cæli]

That's...not what I said at all. In the slightest.

Let me ask you a question: What is the smallest possible denomination of BTC?

For US Dollars, while there may be fractional tracking digitally the smallest denomination is $.01 - one penny. You can't pay for anything with currency in smaller denominations than that. So in $1, the greatest number of fractional amounts - and consequently the maximum number of people who can use part of that one dollar simultaneously - is 100 people. You literally cannot get smaller or have more people participating in the spending of that dollar.

The amount of the smallest possible denomination has nothing to do with the supply of bitcoins. There is 21 millions bitcoin, ensuring the value is never diluted. You can only add decimals, zeros. If you have 1 and couldn't divide it, after adding a decimal you can now send 0.1*10, same amount.

[Elegiac]

The amount of the smallest possible denomination has nothing to do with the supply of bitcoins. There is 21 millions bitcoin, ensuring the value is never diluted. You can only add decimals, zeros. If you have 1 and couldn't divide it, after adding a decimal you can now send 0.1*10, same amount.

This is the same thing as the gold standard.

[Cæli]

You do realise they were not actually physically dividing the metal to create new dollars, right?



Do you know what the term "pegged" means as it refers to currency?



That is entirely a function of lax labor regulation and the inherent imbalance of power that mandatory participation in the labor market creates, not because of fiat.

You can't* divide it like you can with a digital currency, obviously.
I know what pegged means.
Workers having their earnings devalued has had an impact. I think it's wrong to try to minimize that impact, because it devalues the work of the workers. Workers deserve better.

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This is the same thing as the gold standard.

Not completely. Gold is physical and not practical to use, to authenticate, it required the creation of fiat. Fiat has been abused and devalued.

[Elegiac]

You can't* divide it like you can with a digital currency, obviously.

You can, however, change the rate at which the currency is convertible to gold. Which is exactly the same thing as you're proposing with crypto. So clearly;

I know what pegged means.

- you don't know what "pegged" means.

Workers having their earnings devalued has had an impact. I think it's wrong to try to minimize that impact, because it devalues the work of the workers. Workers deserve better.

Except you haven't actually explained how fiat intrinsically devalues their earnings provided their wages keep pace with inflation.

Not completely. Gold is physical and not practical to use, to authenticate, it required the creation of fiat.

Just like how BTC existing in a fixed amount will require the creation of an arbitrary subdivision in order to cover changes in economic activity. Again, basically the same thing as a gold standard.

"It's digital and can be authenticated by the blockchain" does not change the mechanics of a currency whose value is pegged to a fixed commodity. All you're doing is arguing that it needs to be pegged to a different commodity and that doing so will magically solve all our labor problems.

[Cæli]

I cannot fathom how you handwave the exploitation of workers in capitalist wage systems, while trying to blame a mostly-fictional misrepresentation of generational inflation as the sole means by which the value of labor is taken from workers.

Hell, your "there will never be a shortage of Bitcoin" argument is clearly dishonest: all currencies can be divided infinitely. You just add new subdivisions; the old farthing was a quarter-penny in the old Pound Sterling system in the UK. You can add even further subdivisions as much as you like, there are no limits to be found here. You can even just replace the existing system with another, as the UK did when it decimalized the pound. Bitcoin has no advantage whatsoever, here. In fact, it's inferior​, since you fundamentally can't redefine a "Bitcoin" where you can always adjust or change the elements of a fiat system.

Modern accounting already deals with various fractions of a cent. We had terms for that centuries, before decimalization, even.

All I've told you is inherently about protecting the workers, and making them wealthier. For me earnings devaluation is the cause, it has to be fixed that's all there is to it. There is no sane alternative to me anyway.
I'm not a business owner, and it's not my fight, so I won't be defending them. But I don't see anything wrong with someone making a business, hiring workers, and paying them well, as agreed between each others.

All currencies can be divided infinitely, yes. I was just answering to people saying that bitcoin's fixed supply is an issue, it isn't. All fiat currencies are inflationary, which is the problem I have since the beginning. Bitcoin is inherently different.
I never tried to argue about the "infinitely divisible" thing was the most important thing.

[unfilteredJW]

Too many people learning about economics from the YouTube comment section.

[Elegiac]

Too many people learning about economics from the YouTube comment section.

And let's be clear here; they don't actually care about anything like worker exploitation or the mechanics of inflation.

What actually upsets them is that it's The Government™ controlling a thing. Which is why crypto's biggest advocates outside of the immediate circle of grifters tend to be either libertarians or people in countries with corrupt/incompetent governments that they resent.

[Endus]

All I've told you is inherently about protecting the workers, and making them wealthier.

And yet, you focus exclusively on a hypothetical generational slow decline due to inflation, and not the immediate profiteering that occurs due to wage payments and profiteering, which absolutely dwarfs any effects from long-term inflation into irrelevancy, particularly as nobody's being paid the same salary as their grandparents were.

For me earnings devaluation is the cause, it has to be fixed that's all there is to it.

And it isn't. Salaries are renegotiated all the time, in relation to where the value of the dollar is set at that point of negotiation.

There's literally no basis for tying this to inflation, not over generational time frames. Over a decade with a particularly shitty employer, maybe, but that's it.

All currencies can be divided infinitely, yes. I was just answering to people saying that bitcoin's fixed supply is an issue, it isn't. All fiat currencies are inflationary, which is the problem I have since the beginning. Bitcoin is inherently different.
I never tried to argue about the "infinitely divisible" thing was the most important thing.

Then you're intentionally attacking a straw man rather than dealing with their actual point, which is just a different dishonest tactic than the one I thought you were taking.

[Edge-]

The amount of the smallest possible denomination has nothing to do with the supply of bitcoins. There is 21 millions bitcoin, ensuring the value is never diluted. You can only add decimals, zeros. If you have 1 and couldn't divide it, after adding a decimal you can now send 0.1*10, same amount.

That's simply not how value works, as evidenced by the wild flucatuations in BTC price over time. Which is also why, rather than paying in whole-BTC as once happened everything is now done via fractionals that make 1/100th of a whole amount look HUGE in comparison.

Again, I've never once said the number of whole BTC changes. It doesn't.

But I also notice you continue to studiously ignore my question and wonder if there's a reason for that.

[Cæli]

You can, however, change the rate at which the currency is convertible to gold. Which is exactly the same thing as you're proposing with crypto. So clearly;



- you don't know what "pegged" means.



Except you haven't actually explained how fiat intrinsically devalues their earnings provided their wages keep pace with inflation.



Just like how BTC existing in a fixed amount will require the creation of an arbitrary subdivision in order to cover changes in economic activity. Again, basically the same thing as a gold standard.

"It's digital and can be authenticated by the blockchain" does not change the mechanics of a currency whose value is pegged to a fixed commodity. All you're doing is arguing that it needs to be pegged to a different commodity and that doing so will magically solve all our labor problems.

No, you can't divide gold like that. Gold is physical. It has physical limitations. If you divide the representation of gold in some spreadsheet, you're not dividing gold.
And if you have a gold pegged currency, you have no idea if the issuer isn't lying about its reserves. I've told you it's not practical to authenticate. You need to trust someone. Gold is physical, and not practical, there's nothing to argue here.

Fiat is subject to monetary inflation. That means that a worker that has saved 10k in fiat in the bank account will lose value as more time passes. I'm talking about savings (which are initially earnings)

If there is inflation, wages shall reflect the change of inflation, yes. But that is opening abuses, because you can't audit the supply of fiat, you need to trust the issuer, calculating inflation with prices can be manipulated to, given how complex it can be. And if you check reality, you can see that wages do not follow inflation anyway. It's better to just make sure the savings of the worker are preserved.

A subdivision isn't an increase in supply. See my explanation above regarding gold. Pegging is not a good idea. Either a thing is physical or digital, it can't be both.

[Jastall]

If you have 0.10000000 bitcoins and you add a decimal in the system, you still have 0.1 bitcoins. There is not more bitcoins. You can divide as much as you want, there won't be more bitcoins and as such the value will not get diluted. The supply is fixed. But infinitely divisible. There is no more of it. If you divide a pizza into 8 instead of 4, you don't have more pizza.



See above. Not inflation.

Inequality hasn't much to do with volatility, the article doesn't even mention inequality.

Good luck manipulating the price of the currency if everyone on the planet is on it. What will they even sell it for? In that hypothetical scenario, there wouldn't be anything more valuable than bitcoin, why would anyone want to bring the value down. That would be just that, money. If you have 0.01 you will always have 0.01. As soon as those "whale" would sell those bitcoins, since the supply is fixed there's no guarantees that they'll be able to get them all again. Workers will stack wealth over time. Even whales have to eat and purchase things. It doesn't sound too far fetched if you consider a fixed supply system.

You're describing the gold standard then. See how stable the economy of, say, the United States was during that time.

You yourself literally quoted the part where the currency is volatile because extraordinarily large amounts of it can be transacted at a moment's notice by whales. This will not change one bit, the people at the top will have a similar amount of raw BTC and will freely be able to manipulate prices by, for example, passing it to each other, or the endless variants of manipulation that happens in those spheres. As for the currency being immune to manipulation because a lot of people use it, how's that idea working out considering, say, China?

[Cæli]

That's simply not how value works, as evidenced by the wild flucatuations in BTC price over time. Which is also why, rather than paying in whole-BTC as once happened everything is now done via fractionals that make 1/100th of a whole amount look HUGE in comparison.

Again, I've never once said the number of whole BTC changes. It doesn't.

But I also notice you continue to studiously ignore my question and wonder if there's a reason for that.

We're talking about monetary inflation, not market price, that's what I refer to with the word "diluted". Bitcoin is volatile. Price is affected by supply and demand. The supply is fixed, the demand isn't. I'm not sure what was your question sorry. I believe I've given you all the info you need.

[Shadowferal]

Hmf...illusions and delusions vs reality.

[Cæli]

And yet, you focus exclusively on a hypothetical generational slow decline due to inflation, and not the immediate profiteering that occurs due to wage payments and profiteering, which absolutely dwarfs any effects from long-term inflation into irrelevancy, particularly as nobody's being paid the same salary as their grandparents were.



And it isn't. Salaries are renegotiated all the time, in relation to where the value of the dollar is set at that point of negotiation.

There's literally no basis for tying this to inflation, not over generational time frames. Over a decade with a particularly shitty employer, maybe, but that's it.



Then you're intentionally attacking a straw man rather than dealing with their actual point, which is just a different dishonest tactic than the one I thought you were taking.

The problem you mention is the consequence not the cause (to me and I explained why I think so). I want to correct the cause. Fixing the consequence, I'm still open to your suggestions.
We disagree on the devaluation of the savings of the worker. I think it's a very bad thing to do.
Salaries are renegotiated but we're talking about the savings. What the worker has already earned. Salaries have nothing to do with past savings.

I think I've dealt with their point. Really I've answered the best I could. If not they can state the point more clearly.

[Elegiac]

No, you can't divide gold like that. Gold is physical. It has physical limitations. If you divide the representation of gold in some spreadsheet, you're not dividing gold.

That is literally how the currency worked prior to 1968.

And if you have a gold pegged currency, you have no idea if the issuer isn't lying about its reserves. I've told you it's not practical to authenticate. You need to trust someone. Gold is physical, and not practical, there's nothing to argue here.

"It is easier to authenticate how many bitcoins there are" still does not change the mechanics of how fixed currency works. What you are proposing is a fixed currency, just fixed to bitcoin.

Fiat is subject to monetary inflation. That means that a worker that has saved 10k in fiat in the bank account will lose value as more time passes. I'm talking about savings (which are initially earnings)

If there is inflation, wages shall reflect the change of inflation, yes. But that is opening abuses, because you can't audit the supply of fiat, you need to trust the issuer, calculating inflation with prices can be manipulated to, given how complex it can be. And if you check reality, you can see that wages do not follow inflation anyway. It's better to just make sure the savings of the worker are preserved.

First off; most people, especially people in the working class, are not sitting on large supplies of liquid currency that would be devalued in this way.

Second; the idea that saving money builds wealth is a myth. Investment (i.e. spending money) is what builds wealth.

Third; you do realise that people sitting on large savings deposits is a sign of poor economic health, right?

A subdivision isn't an increase in supply.

Yes it is. You are increasing the amount of units available for exchange whether that be through paying wages or buying goods/services.

Pegging is not a good idea.

You have literally been advocating for the currency to be pegged to a fixed supply of BTC.

[Cæli]

You're describing the gold standard then. See how stable the economy of, say, the United States was during that time.

You yourself literally quoted the part where the currency is volatile because extraordinarily large amounts of it can be transacted at a moment's notice by whales. This will not change one bit, the people at the top will have a similar amount of raw BTC and will freely be able to manipulate prices by, for example, passing it to each other, or the endless variants of manipulation that happens in those spheres. As for the currency being immune to manipulation because a lot of people use it, how's that idea working out considering, say, China?

Gold is physical, not digital, requires trust about the reserve of the currency, can be manipulated. I'm not advocating for a "gold" standard. But I think we need a digital currency with fixed supply.

I've already answered you about the whales I believe. And no point in comparing it with fiat, fiat has no fixed supply.

[Elegiac]

Gold is physical, not digital, requires trust about the reserve of the currency, can be manipulated.

My brother in christ, all forms of currency require trust; currency itself is literally a quantized exchange of trust.

That in no way addresses the problems that crop up when that supply of currency is insufficient to cover the amount of economic activity going on due to that supply being fixed. Those sorts of economies have existed historically and they have proven disastrous.

[Cæli]

That is literally how the currency worked prior to 1968.



"It is easier to authenticate how many bitcoins there are" still does not change the mechanics of how fixed currency works. What you are proposing is a fixed currency, just fixed to bitcoin.



First off; most people, especially people in the working class, are not sitting on large supplies of liquid currency that would be devalued in this way.

Second; the idea that saving money builds wealth is a myth. Investment (i.e. spending money) is what builds wealth.

Third; you do realise that people sitting on large savings deposits is a sign of poor economic health, right?



Yes it is. You are increasing the amount of units available for exchange whether that be through paying wages or buying goods/services.



You have literally been advocating for the currency to be pegged to a fixed supply of BTC.

Yeah, and I'm not advocating for that because of the issues I've described.

I'm not proposing to fix anything to bitcoin, I'm proposing to use bitcoin. That or something better if that exists one day.

I'm not saying people are sitting on large supplies of liquid currency, I say that they can't even save now as a consequence of our current system.

Working shall build wealth. It hasn't been building wealth because savings are getting devalued. People shall not have to take risks to build wealth.

Workers that earned their savings shall do what they want with the fruit of their labor. If they don't want to consume, good for them.

I do not advocate for anything to be pegged to bitcoin, but to use bitcoin directly, again.

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My brother in christ, all forms of currency require trust; currency itself is literally a quantized exchange of trust.

That in no way addresses the problems that crop up when that supply of currency is insufficient to cover the amount of economic activity going on due to that supply being fixed. Those sorts of economies have existed historically and they have proven disastrous.

There's a difference between trusting an opaque system like the fiat system, or a gold pegged currency, and trusting an open, auditable system like bitcoin.
Has there ever been in history a case of digital currency that has an actual fixed supply, while being "infinitely divisible"? (thinking about it the term sounds weird, it's more just adding zeros)

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That's just semantics at this point.

The U.S. government could just say there is 1 whole dollar in existence, and any dollars you're carrying in your wallet is some arbitrary decimal point. That'd make the dollar a much more scarce resource than bitcoin, since there's only 1 dollar and 21000000 bitcoins.

Yes they can do that. Correct. I would welcome that. It would actually compete seriously with bitcoin. I think they will never ever do that though, since their system is based on infinite debt and inflation. And it would likely still be centralized so, probably won't win. Why going for the american thing when there's a neutral non centralized thing next to it. (for the non americans)

[Elegiac]

Yeah, and I'm not advocating for that because of the issues I've described.

I'm not proposing to fix anything to bitcoin, I'm proposing to use bitcoin. That or something better if that exists one day.

I do not advocate for anything to be pegged to bitcoin, but to use bitcoin directly, again.

If your answer to "what happens when the economy grows" is for people to use smaller subdivisions of bitcoin in order to cover that increase in economic activity, that is functionally the same thing as pegging your currency to a fixed commodity and increasing the money supply by valuing the medium of exchange as smaller fractions of that commodity.

You do not know what you are talking about.

I'm not saying people are sitting on large supplies of liquid currency, I say that they can't even save now as a consequence of our current system.

If they are not sitting on a large supply of liquid currency then there is nothing being devalued.

Working shall build wealth. It hasn't been building wealth because savings are getting devalued. People shall not have to take risks to build wealth.

Or; it hasn't been building wealth because working does not build wealth. Which has fuck all to do with what currency is being used.

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There's a difference between trusting an opaque system like the fiat system, or a gold pegged currency, and trusting an open, auditable system like bitcoin.

Fiat is not "opaque"; central banks always announce adjustments to the money supply and their reasons for doing so. You just happen not to like that process because it's The Government™ doing it.

And no; all currency requires trust, period. Something being "open and auditable" does not change that.

Has there ever been in history a case of digital currency that has an actual fixed supply, while being "infinitely divisible"?

If it is infinitely divisible then it is not fixed by definition.