And newton pegged the british pound to gold. He also was an alchemist which is effectively the pursuit of using math to create gold. Bitcoin would have been quite interesting to him in that regard. Someone figured out how to create gold from math.

Yes. But I don't know that bitcoin is infinitely divisible although they say you can just add decimals. It's far better suited for large value transactions which is what the bitcoin community and world is confused about.

They were already on a precious metals system. He just argued that there should be a stable exchange rate between silver and gold. It didn't improve their situation.

He also lost a fortune investing, and this was because he was so good at it.

It is crappy for large transactions since it doesn't have the one thing necessary for any transactions: stable short-term utility.

Nash said it was favorable for them. He also remarked that george the "x" (can't remember) was the german king at the time and an early hanover "which is not irrelevant" and I have not figured out what that means.


This utility is increasing over time which is a significant observation imo.

Nash wasn't good at economics, so it really doesn't matter what he said. The rest does sound quite like a quote of Nash discussing politics.

Utility = what of practical value you can trade it for.

That has increased over time.

However, it cannot be a useful medium of exchange unless it has stable short-term stability.

Bitcoiners think bitcoin will eventually cause fiat to hyperinflate. Given this possibility however, or regardless, it is possible for banks to inflation target bitcoin's value. It might seem implausible while bitcoin's price is increasing dramatically. But bitcoin is only so valuable because our currencies are not very stable (some are). If central bank's targeted bitcoin as a coalition then it would lose its importance as a potential inflation hedge. It would only be secularly deflationary value wise and not such an impossible task.

When removed of its inflation hedge component the price of bitcoin is left to its cost of production. It was Satoshi Nakamoto, the pseudonymous creator, that said "the price of any commodity tends towards its cost of production" and from this we can see bitcoin would be reduced to a price discovery of the race towards the cheapest energy producer. Then it is quite easy to observe that bitcoin becomes akin to nash's icpi which is a standard for value made of an apolitical basket of commodity production costs.

That is an interesting theory belief, but the important fiat currencies are quite stable over the short term and short-term stability and cost of transfer are all that matters for a medium of exchange. I cannot even think of a plausible mechanism whereby any fiat cryptocurrency could cause hyperinflation of the important fiat government cryptocurrencies.

It is unlikely that the central bankers will give a rat's ass about cryptocurrencies. There is some likelihood that cryptocurrencies will be targeted by governments for other reasons, I guess.

When Satoshi said "the price of any commodity tends towards the cost of production" I think people missed the significance. It implies gold will lose its monetary component (insane to suggest, especially at the time). Cb's are already talking about bitcoin, Canada governor of central banking stated it is one of the things that keeps him up at night. It has a 300 billion dollar market cap. Soon it might be in the trillions and this would begin, perhaps, to affect gold. In comparison to gold, bitcoin is far cheaper and faster to transact with across the world. As a currency, bitcoin sucks, as a high value settlement system, its prime.

bitcoin is at the level of the imf sdr cap. I think perhaps this years cb's will give a rats ass.

Criticism appreciated over the years. Cheers.

Bitcoin is akin to ICPI in the same way as you are a kin to a butterfly. It works out to a gazillionth cousin a gazillion places removed. The cost of production has little to do with it since there are about 4200 transactions per block mined and the cost per transaction is set by fiat decision of the miners.

The reason, again, why ICPI (or any related system) will never gain traction is because the value of commodities is inherently highly volatile and highly volatile things do not make for good mediums of exchange.

If the price of any commodity tends towards its cost of production, then the race towards the cheapest energy is a great standard, as great as a theoretical ICPI. It is certainly apolitical.

If it weren't for the miners setting by fiat the cost per transaction, and IF prices of commodities (including energy) were stable, then that would make sense.

Predictable is more important. Apolitical is the most importantness. Nash proposed that we take the political aspect out of the supply of our currencies. IF (capitals) the world used bitcoin as a universal currency, it would achieve that result. If china used bitcoin and canada did, the price of milk would reflect supply demand of the local area.

This is a killer insight.

The problem is that even if every single thing you might say "if" in front of were true (any "if" you can think of related to local/regional/global market conditions and governments), then commodities would still be highly volatile and thereby the entire house of cards still falls down and will never be adopted as an important medium of exchange.

if a specific currency was established for the purpose, there's the potential for nodes to be established on a charity basis reducing the Tx cost to near zero.

donations could potentially be directed from the general public to aid workers at the coal-face rather than filtering through several layers of aid/govt/other_bureaucratic cost. a series of accounts could be established to allow us to deposit funds directly to accounts for specific purposes - an account that builds a well, another that funds education for a specific child, another that provides an operation.

choose from a list on a website and send your donation straight to the intended outcome. use the same website to accept and validate specific new projects and provide direction to aid organisations on how to access funds at the coalface and convert to fiat. enlist doctors and surgeons willing to accept the currency in return for medicine and surgery.

there are some logistics to sort out here, but nothing that seems insurmountable.

even if that Tx cost is higher than anticipated, it's still a pittance compared to the 90-95% of donation revenue lost to admin in virtually every aid organisation in the world.

I think what you are saying is that if the political component of the money supply was taken out, then the prices of commodities would fluctuate by the supply and demand. This is optimal. I think you know this. This end is achieved by both the asymptotic improvement of money and/or the bitcoinization of the world.

The prices of commodities do already fluctuate by supply and demand. I agree that this is ideal and it is as it should be.

A medium of exchange that fluctuates as wildly as commodities do would be silly, and that is why we will NEVER again have a commodity-based medium of exchange. A commodity-based currency is in less demand than ****-flavored lollipops.

****-flavored lollipops could possibly gain some traction, but ****-flavored lollipops are a non-starter

To all the impartial observers. this is not an argument against bitcoin.

@brianthemick you taught me, and I learned.

I actually agree with that. It is just an argument against fiat currencies (such as bitcoin) that have a floor of commodity value.

It could totally get to 100x its cost of production. Go yay go!

lol.

someone ban this troll.

You called bitcoin fiat.

Satoshi said price of any commodity tends towards its cost of production

It is a fiat currency. The miners control the rules by fiat.

You can't ban the Irish, they are always too drunk to understand.

On an even sillier note, this thread doesn't really belong in SMP. It should be in BFI (where similar threads exist) but that is only one strike against it. I need two strikes* to close this thread down.

Thus: to the original question posed. If you accept the axiom that money is just a replication of a religious concept in monetary form then you have the answer to your original question. You should be able to figure this out on your own from the above axiom. It you dispute the axiom as a false one then you are back at square one. But you can ape the religious aspect of currency systems and on that basis two strikes will send this thread to oblivion (no religion in SMP!) - or I'll move it to RGT where it really belongs.

Know that the margin is slim at keeping this thread open. I can be bribed; I have a Venetian's soul. But you can't afford it. So don't try.

* I rule by fiat; so the number of strikes before you are out depends on my personal predilections and the number of drinks I've consumed on any given day.