Bubble or no, from a personal perspective I will not use bitcoin as a currency to exchange goods - things like purchasing items or paying salaries. Bitcoin's value is just too volatile, why would I pay someone a certain amount in bitcoins, when it'll probably rise up to 10 times the current value in a few weeks? But as a medium for investment, like buying stocks, bitcoin does provide a novel and alluring option.
>why would I pay someone a certain amount in bitcoins, when it'll probably rise up to 10 times the current value in a few weeks?
Why would you pay someone a certain amount in USD, when you could buy Bitcoins instead and they would probably rise to 10 times the current value in a few weeks?
I'm no economist, but isn't this blurring the lines between what an asset is and what a currency is? Isn't a currency fundamentally a perfectly liquid asset?
As for previous commenters, the fact that the value of a Bitcoin might be worth ten times more (or less) what it is now in a few weeks has more to do with its volatility than its depreciative nature.
Why would you ever risk money by lending it when you could just "hide it under your mattress" and make money? It's appealing to those who have the option to do that, but I believe it's highly suboptimal from an economics point of view.
The funny thing is that even though it's bad economically, its deflationary nature is good for the uptake of the currency, because, provided more people start using it, those who are already using it become richer (which is why some accuse it of being a pyramid scheme).
On the other hand, its mid-term value depends on why people are buying into it now. At the moment, I see four groups of people: 1) the idealists who believe it's simply a more perfect form of currency that can't be corrupted by governments et al; 2) the technologists who think it's a neat idea; 3) the speculators who think it's going to go up because it's going up; 4) the users who find it more useful than regular currency (like those on Silk Road). I can't help but think that the speculators are the biggest group at the moment. But I might be wrong.
To answer your question, no, a currency is not fundamentally a perfectly liquid asset. "Currency" is a really, really big word, but at its heart, currency is any medium of exchange. There are myriad microcurrencies that are out on the market now, of which Bitcoin is just one.
However, the difference is that Bitcoin has been primarily commoditized. People aren't using Bitcoin as a medium of exchange, by and large. They're trading dollars for Bitcoins in a hope to get more dollars back in the future. That's an investment in an asset, not a currency trade.
Now, to confuse things further, there is a FOREX market which allows you to (if you so chose) speculate on currency. By and large, these currencies fluctuate within the FOREX based on their respective purchasing power at that time (there's a lot that goes into this--I'm simplifying). The thing that makes the FOREX unique is that you can trade any currency with any currency in it. It's not a commodity market, wherein you need to sell your commodity to trade for another one.
Bitcoin wants to be a currency, but is a commodity. Until it becomes a viable (viable in the sense of macro-level use and acceptance) medium of exchange, it will only be a commodity. In one transaction, anything can look like a currency, and anything can look like an asset. But when you throw those words around, realize that at a mirco level, they're nigh meaningless.
> Isn't a currency fundamentally a perfectly liquid asset?
I'd say the defining property of a currency is that it's in wide use as a medium of exchange.
> its deflationary nature is good for the uptake of the currency, because, provided more people start using it
Except that the deflationary nature makes people hoard it, not use it.
For Bitcoin to succeed in the long run, the most important influence has to come from normal businesses accepting it as payment, not from speculators attracted by its skyrocketing market price.
You do not "make" money, when you hide them under a mattress.
Assuming a stable money supply, when all is said and done, you own the same fraction of total purchasing power at the end that period as you had when it started.
You do not get richer, if that's what you mean by making money. You just keep what you had.
But you do make money! When the value of Bitcoin goes up, your wealth increases because the entire Bitcoin economy is worth more, even though your fraction of it remains constant.
Or, to look at it another way, imagine that Bitcoin was the only currency in the world and there were only one million people who each owned 20 Bitcoins (maybe they're communists who have just started using money). Now, give it a few years and the population has doubled so that the average person has 10 Bitcoins. Is the person who still has 20 coins richer than he was at the start? I say yes, because, assuming that people are just as productive, the entire economy has doubled in size in an absolute sense (it can produce twice as much), so those 20 Bitcoins can buy twice as much as when there were only one million people.
(As a less important point, as Bitcoins are irretrievably lost, the fraction of Bitcoins that a person owns of the "real" Bitcoin economy grows larger. And I don't see why this deflationary pressure is different to the deflationary pressure caused by somebody new getting into the Bitcoin economy.)
Say there are 1000 people in the country, and WLOG each of them owns 1/1000th of the wealth.
One of them goes away for 100 years and comes back. The entire country is richer: there are more resources, more people, more goods, more IP, more of everything. And this guy still expects to have claim to 1/1000th of everything in the country.
It's extremely obvious why that first-mover would love that system, and try to convince everyone else to go along with it. It's very dubious what the others would get out of it or why they would ever buy in, besides imagining they could some day be the one who gets to exploit the system at the expense of everyone else.
You're confusing money and wealth. And you saying it yourself, to quote "your wealth increases"
Yes, but this is not the same as making money. You're are not richer in relative terms, than you were. It's only stuff who has get cheaper around.. because people have learned how to produce stuff more efficiently, i.e. cheaper.
And you example with doubling population (in a few years no less) is cheating because.. because you have just added a lot poor people into example.. But, OK. Suppose those of two extra people a person A kids.. But what exactly logic are they not entitled to the whole value of their parent savings?
It is deflationary, of course. What I think the sentence shows is that this is not that huge of a problem. You still will spend your dollars, obviously, even though there is a deflationary currency out there that you COULD make a profit on, because at some point you want or need to spend your dollars. The same logic would apply within the realm of BTC.
There is an easy answer. Because you need it, and you've invested in Bitcoin (to the extent where you can't get what you wanted to buy without selling some bitcoins.)
Otherwise, with the trend as it is, I think you're right! Hoard your bitcoins and don't cash them in until you've spent every US dollar and don't have any more.
How many people have that kind of confidence that the bubble will continue to grow?
Will you bet your mortgage payment on it? I have kept a meager bitcoin savings, but every time I cash out I regret it, and I am getting used to that feeling. And as time goes on, that meager savings begins to look more and more like a full month's expenses in the bank.
Afraid that some day soon I will regret not cashing out when the price of BTC was so high. Oh well, knock on wood that day is not today.
This is just great. Enjoyed it - posted it on fb and ready to watch it again - then the server is apparently overloading. Wonder what the traffic is like.
A 3d scanner and 3d printer, both controlled by a phone. I should be able to send whatever I scanned to my friends and have him/her to print it off rightaway(3d fax?).
I beg to differ. What you are describing is scientific dogma, simply another kind of symbolism. Totally natural though: when confronted with too complex a situation, we seek abstractions so we are not overwhelmed with the enormity of the information.
The kind of abstraction that works is greatly influenced by its surrounding context. In more complex issues (say in law), appeal to common sense is sometimes more preferable than using the most fashionable 'scientific theory'. You don't like your spouse? How about teaching her evolutionary biology/psychology?
Dogmatism breeds the act of taking these out of context. Some parts of math works in their internal framework(i.e. math), but taking it out of context is at best, dumb, and at worst, harmful. Having theorems giving infinite-length messages yield certain events of probability one makes all 'realistic' outcomes probability zero. Same for theorems too sensitive to perturbation in axioms that removing a single point turns things upside down.
We don't need 'institutional science', or dogma, or 'mathematics strictly contained in universities', all we need is science, is mathematics, is reason, and understanding their application context.
Such debate often occurs with confusing science with 'opinions of the majority of scientists in academia of what's right'. No, science is not the latter.
[TL;DR] Science and math are useful in a very specified context, and as such is a framework of thinking. Those who take some of their context-dependent results universally and urge everyone to accept it is dogmatic, not scientific.
And seriously, before jumping into node one needs to know some javascript. Haverbeke's 'Eloquent Javascript' and Resig's 'Secrets of the JS Ninja' will provide a starting point. They're one of these rare books you thought 'boy, I wished it was longer...'.
'Up and Running with Node.js''s code aren't thoroughly polished yet (eg.chapter 2), but plenty people refined and posted them on StackOverflow.
Here is something that's easily overlooked: bringing design and manufacturing together promotes innovation. Having a more rapid iteration cycle is important, but why? Here's a principal reason: it allows design flaws to become visible in the manufacturing, and leads to a redesign if necessary.
Having both these modules in close (spatial and temporal) proximity helps minimizing efforts spent in irrelevant problems. The general rule holds for most softwares with 'manufacturing' replaced by user appreciation.
The hidden cost of taking manufacturing offshore is that a GREAT deal of industrial knowledge is lost. How do you know a problem needs to be taken into consideration if... you don't even know what the problem is?
The glorious days of Bell Labs seems like heaven for tinkerers. Designing, implementing and manufacturing camps don't alienate but simply part of one living organism.
I feel you on the 'life' part. Only people that have been deeply commited to academia, and realizing its role in this era, can understand the emotional impact on this choice.
Quick question for you and the GP, if you would be so kind:
I'm currently working on a project which is set to become my master's thesis (I'm writing my final undergrad exams this month). I started it a few weeks ago; before that I never thought I would go to grad school and I had a severe distaste for academia.
Now I'm feeling academia suck me in. It's hard to describe, but I'm "good" at the aspects of academia that I hate--the bizarre politics of it, for one. I also really enjoy having the freedom to work on hard problems without any immediate paths to monetisation.
Do I get out now? Is it okay to do this for a while? I am obviously not asking strangers on a message board to make my life decisions for me, but I'm very curious to hear your thoughts.
An academic career was my dream job while I was an undergrad, but it disappointed me later when I actually reached that goal. I'd say go for it if you feel it'll be rewarding, but don't stick with it out of stubbornness when it no longer makes you happy. There's more freedom waiting elsewhere if you don't shun the responsibility (in entrepreneurship). But just because it didn't work for me, it doesn't mean it's generally bad. Many people seem to be quite happy working in academia.
