Bitcoin to be accepted at Bobby Dodd

[GTRX7]

Only at Georgia Tech: LINK

 

[awbuzz]

Just can't get my head wrapped around it...

 

[DTGT]

I thought the only reason to use bitcoin was to "anonymously" buy weed with an online paper trail that bicoiners think doesn't exist.

 

[GTNavyNuke]

Abuzz, isn't it harder to get your head wrapped around the fact that the pieces of paper in you wallet are worth about the same amount as before the Fed started quantitative easing and made $4,000,000,000,000 more dollars available for circulation while "lending" money to banks at essentially zero percent interest?

Finance in a fiat money system will fail at some point. Bitcoins are a possible answer to that. I wouldn't own them for speculation but that's because I don't understand them. I wish I did.

As the article points out, bitcoins can be used over the entire campus. And that company, BitCoin, I believe was founded by GT grads.

 

[DTGT]

Abuzz, isn't it harder to get your head wrapped around the fact that the pieces of paper in you wallet are worth about the same amount as before the Fed started quantitative easing and made $4,000,000,000,000 more dollars available for circulation while "lending" money to banks at essentially zero percent interest?

Finance in a fiat money system will fail at some point. Bitcoins are a possible answer to that. I wouldn't own them for speculation but that's because I don't understand them. I wish I did.

As the article points out, bitcoins can be used over the entire campus. And that company, BitCoin, I believe was founded by GT grads.

It is not hard to get your head around it. The money never entered the economy. The banks didn't loan it out.

I guess saying all fiat money will fail is like saying the earth will eventually be consumed by the sun. It is a meaningless statement. Bitcoin is not an answer; it is inherently deflationary. There is a limit on the number that can be mined and the cost to mine later Bitcoins is increasing. The group of stuff to buy will outpace the currency; less money chasing stuff, less cash for everyone to spend.

You have similar problems with gold, except the gold exchange rate additionally allows traders to rip the face off the governments with arbitrage. With gold, the limit of how fast your economy can grow, and increase the money supply, is arbitrarily limited by your mining technology.

 

[vamosjackets]

It is not hard to get your head around it. The money never entered the economy. The banks didn't loan it out.

I guess saying all fiat money will fail is like saying the earth will eventually be consumed by the sun. It is a meaningless statement. Bitcoin is not an answer; it is inherently deflationary. There is a limit on the number that can be mined and the cost to mine later Bitcoins is increasing. The group of stuff to buy will outpace the currency; less money chasing stuff, less cash for everyone to spend.

You have similar problems with gold, except the gold exchange rate additionally allows traders to rip the face off the governments with arbitrage. With gold, the limit of how fast your economy can grow, and increase the money supply, is arbitrarily limited by your mining technology.

That sounded like some really important stuff you just said ... but, I didn't understand one word of it. And, usually I consider myself a fairly smart guy. I can talk calculus and physics with the best of them, but the economy stuff blows my mind ... I have no idea how it works.

 

[ClydeBrick]

Economics - The Dismal Science

 

[DTGT]

That sounded like some really important stuff you just said ... but, I didn't understand one word of it. And, usually I consider myself a fairly smart guy. I can talk calculus and physics with the best of them, but the economy stuff blows my mind ... I have no idea how it works.

I'll take the compliment. Thanks.

 

[Bruce Wayne]

That sounded like some really important stuff you just said ... but, I didn't understand one word of it. And, usually I consider myself a fairly smart guy. I can talk calculus and physics with the best of them, but the economy stuff blows my mind ... I have no idea how it works.

What DTGT wrote has a lot of unspoken premises so don't worry too much Vamos. Man I wish this thread never existed as I don't want to get sucked into debating economic theory, so I will lodge some criticisms and retire.

"I guess saying all fiat money will fail is like saying the earth will eventually be consumed by the sun. It is a meaningless statement."
This first claim that is rhetoric without an argument. For that matter, "the earth will eventually fall into the sun" is also not a meaningless statement. It may not cause concern in the short-run because it assumes catastrophe to be far into the future, but it is meaningful. So your implication is that (presumably the dollar) will only fail way off in the distant future, so don't worry, be happy! Since it is true that every paper currency (not in use) through human history has "failed" the statement is far from meaningless. But what does the statement mean? Is it like saying "everyone who ever ate a carrot has died or will one day die"? To get the meaning one has to determine what "failure" is with regard to money which means you have to take a stand on what the nature of money is. So the real point of the statement is that fiat currency has no way to maintain a value, i.e., it "fails" to be real money. Failure is thus based on not doing what money is supposed to do, which is maintain a value so as to allow for the non-barter exchange of goods/services.

"Bitcoin is not an answer; it is inherently deflationary."
Whether Bitcoins are "an answer" is irrelevant to the reason given for it to not be one since the complaint is that it is "inherently deflationary." This claim has the implied premise lurking that being "deflationary" is a "bad" thing for money and that "inflation" is a good thing. Such a claim is counter-intuitive. However, it is this definition of money that is behind his first statements addressed above. His warrant for this claim seems to be:

"The group of stuff to buy will outpace the currency; less money chasing stuff, less cash for everyone to spend."

If the "stuff to buy" grows in volume then the real purchasing power of any one unit of "real money" increases in value, ceteris paribus, since of course there has to be demand for the "stuff." If there is not real demand for the increasing "stuff" then the stuff will simply become cheaper or not get produced as fast. So either purchasing power of money increases OR prices decrease (basically the same thing actually). I have a hard time seeing the problem with the scenario.

To the extent that he is pointing to a real problem ("stuff" on the one side "outpacing currency" on the other) it is a matter of the use of a currency which cannot maintain its value, i.e., that fails as real money. Therefore, this entire line of reasoning fails to step back from a presumption of the superiority of fiat currency in order to determine if it in fact is superior, or even if it is "money" at all.

Ok it is game week and I have to seriously be writing today anyway. DTGT, you are welcome to reply to my criticisms but I have to not revisit this thread until at least 2 weeks from now.

 

[MeandI]

Is bitcoin even a popular currency? I've heard of it but I've never actually heard of it being used. I just feel like this is like accepting pesos or yen

 

[Squints]

Lots of great football talk in this thread.

 

[bigsexy1211]

I agree with Bruce Wayne... only makes sense that printing money devalues the money when it is just paper. That's all it is these days. Plus the paper they print is owed back with interest... so there is never enough money in the system to pay back the debt. If everyone paid their debt, it would cause a deflationary collapse.Total BS system that was built to fail... probably on purpose.

 

[GTNavyNuke]

DTGT- Much of the $4T was used to buy treasuries and mortgage backed securities. So much of it made it's way into the economy by supporting the housing market or our deficit.

However, money is fungible and the velocity of money has been going down. Why the Fed doesn't understand. But I think the reason is that almost all major asset classes have an expected 0% rate of return over the next 8 years or so. That's because the zero rate interest policy for the last few years has forced speculation since the FED has made it "unwise" to save or reward savers. But now we are at the point that those holding "money" would rather not speculate further, including the banks, and thus the money "turns over" less. Ten years from now we will look back at what the Fed and central banks have done and say that the collapse from the debt and equity bubbles was as unavoidable as the tech or housing bubble.

I do think that 10% of one's liquid assets should be in gold, and preferably bullion in one's possession. Bitcoins I don't understand well enough, but I can understand why central banks are scared of anything which will reduce their influence.

I am glad that GT is using bitcoins and I may get a few just to play with and use.

 

[LongforDodd]

Abuzz, isn't it harder to get your head wrapped around the fact that the pieces of paper in you wallet are worth about the same amount as before the Fed started quantitative easing and made $4,000,000,000,000 more dollars available for circulation while "lending" money to banks at essentially zero percent interest?

Finance in a fiat money system will fail at some point. Bitcoins are a possible answer to that. I wouldn't own them for speculation but that's because I don't understand them. I wish I did.

As the article points out, bitcoins can be used over the entire campus. And that company, BitCoin, I believe was founded by GT grads.

Might you be talking about the service that is handling the transactions which is called Bitpay? Here's their Wiki page. Says BitPay was founded in ATL. IDK, personally.

http://en.wikipedia.org/wiki/BitPay

 

[DTGT]

First of all, Go Jackets! THWG! And Miami is going down tomorrow.

Please pardon the long post. I had to go as close to point-by-point from two other long posts:

"I guess saying all fiat money will fail is like saying the earth will eventually be consumed by the sun. It is a meaningless statement."
This first claim that is rhetoric without an argument. For that matter, "the earth will eventually fall into the sun" is also not a meaningless statement. It may not cause concern in the short-run because it assumes catastrophe to be far into the future, but it is meaningful. So your implication is that (presumably the dollar) will only fail way off in the distant future, so don't worry, be happy! Since it is true that every paper currency (not in use) through human history has "failed" the statement is far from meaningless. But what does the statement mean? Is it like saying "everyone who ever ate a carrot has died or will one day die"? To get the meaning one has to determine what "failure" is with regard to money which means you have to take a stand on what the nature of money is. So the real point of the statement is that fiat currency has no way to maintain a value, i.e., it "fails" to be real money. Failure is thus based on not doing what money is supposed to do, which is maintain a value so as to allow for the non-barter exchange of goods/services.

The only fiat currencies that failed, did so because the government failed. Many of the fiat currencies that no longer exist were exchanged for a new currency. A recent example is the French franc being exchanged for the euro. The franc no longer exists, but it did not lose value for the people using it. (I don't think giving up their Central Bank was a good thing, but we are not going into that. I don't care if you disagree; I won't respond on this point.)

"Bitcoin is not an answer; it is inherently deflationary."
Whether Bitcoins are "an answer" is irrelevant to the reason given for it to not be one since the complaint is that it is "inherently deflationary." This claim has the implied premise lurking that being "deflationary" is a "bad" thing for money and that "inflation" is a good thing. Such a claim is counter-intuitive. However, it is this definition of money that is behind his first statements addressed above. His warrant for this claim seems to be:

"The group of stuff to buy will outpace the currency; less money chasing stuff, less cash for everyone to spend."

If the "stuff to buy" grows in volume then the real purchasing power of any one unit of "real money" increases in value, ceteris paribus, since of course there has to be demand for the "stuff." If there is not real demand for the increasing "stuff" then the stuff will simply become cheaper or not get produced as fast. So either purchasing power of money increases OR prices decrease (basically the same thing actually). I have a hard time seeing the problem with the scenario.

First, I never claimed that inflation was good. Second, I want to be clear that inflation and deflation are not opposites. They are different problems with different root causes, effects, and solutions.

Wages are sticky and naturally resist declining (downward nominal wage rigidity); this is part of the problem with deflation. You can't cut prices without cutting wages. One man's purchase is another man's income. In real life, cutting the wages of everyone in the nation can't be done to match deflation... and chaos ensues.

Weak inflation has historically proved to not be a problem.

To the extent that he is pointing to a real problem ("stuff" on the one side "outpacing currency" on the other) it is a matter of the use of a currency which cannot maintain its value, i.e., that fails as real money. Therefore, this entire line of reasoning fails to step back from a presumption of the superiority of fiat currency in order to determine if it in fact is superior, or even if it is "money" at all.

If the nation's currency is Legal Tender, then it is mandated by law that a creditor must accept it for repayment of debt. Taxes are required to be paid in the nation's currency. So, yes, Legal Tender is superior for paying for things and doing business in nations...

DTGT- Much of the $4T was used to buy treasuries and mortgage backed securities. So much of it made it's way into the economy by supporting the housing market or our deficit.

Here's how this actually worked: 1) banks have insufficient liquid funds according to the stress tests 2) bank gives MBS to the treasury 3) the treasury increases number in the bank's account with the treasury 4) bank passes stress test and holds most of the extra digital (not paper) currency in their account with the treasury.

Some of it leaked out into the economy, but not enough to notice and certainly not enough for the gold bugs to be right about inflation.

However, money is fungible and the velocity of money has been going down. Why the Fed doesn't understand. But I think the reason is that almost all major asset classes have an expected 0% rate of return over the next 8 years or so. That's because the zero rate interest policy for the last few years has forced speculation since the FED has made it "unwise" to save or reward savers. But now we are at the point that those holding "money" would rather not speculate further, including the banks, and thus the money "turns over" less. Ten years from now we will look back at what the Fed and central banks have done and say that the collapse from the debt and equity bubbles was as unavoidable as the tech or housing bubble.

I agree that the velocity of money is a lot less than healthy right now. Much of this decline is due to the loss of confiscatory taxes on executive wages that have no basis on their marginal worth to the company (they are currently based on their high bargaining power for higher wages) and the loss of high marginal estate taxes for particularly obscene estates. If you value meritocratic ideals, then you are hard pressed to justify a tax system that allows people to not work a day in their lives, yet, are able to muck up democracy for the rest of us that value hard, honest work.

Let's talk at the end of 2022 and see what the returns of the market were. My money is voting on more than 0%.

Speculation is but a trickle in the velocity of money. The vast majority of it comes from the bottom 90%. The people in the worst situations are unable to save and they end up spending every penny. Remember, one man's purchase is another man's income. This is where the loss of velocity originated.