- From: Melvin Carvalho <melvincarvalho@gmail.com>
- Date: Sun, 26 Jan 2014 04:17:58 +0100
- To: Joseph Potvin <jpotvin@opman.ca>
- Cc: Web Payments CG <public-webpayments@w3.org>
- Message-ID: <CAKaEYh+LBw9g8Yo0R7L7MecKuya+Eck4JREn=RoyLTESodvQqA@mail.gmail.com>
On 26 January 2014 03:44, Joseph Potvin <jpotvin@opman.ca> wrote: > [Tanential to the web-payments topic, except in terms of considering how > medium-of-exchange volatility is to be handled...] > > RE: "volatility being inherently terminal" + " when a store has a "50% > sale"" > > Melvin, If you say that, then do you stand with the governments of Finland > and China who have determined that BTC is a virtual commodity, not a type > of money? > > http://www.bloomberg.com/news/2014-01-19/bitcoin-becomes-commodity-in-finland-after-failing-currency-test.html > No strong opinion on this one, but satoshi had some interesting insights here: [[ https://bitcointalk.org/index.php?topic=583.msg11405#msg11405 As a thought experiment, imagine there was a base metal as scarce as gold but with the following properties: boring grey in colour, not a good conductor of electricity,not particularly strong, but not ductile or easily malleable either, not useful for any practical or ornamental purpose, and one special, magical property: can be transported over a communications channel. If it somehow acquired any value at all for whatever reason, then anyone wanting to transfer wealth over a long distance could buy some, transmit it, and have the recipient sell it. Maybe it could get an initial value circularly as you've suggested, by people foreseeing its potential usefulness for exchange. (I would definitely want some) Maybe collectors, any random reason could spark it. I think the traditional qualifications for money were written with the assumption that there are so many competing objects in the world that are scarce, an object with the automatic bootstrap of intrinsic value will surely win out over those without intrinsic value. But if there were nothing in the world with intrinsic value that could be used as money, only scarce but no intrinsic value, I think people would still take up something. (I'm using the word scarce here to only mean limited potential supply) ]] > > Sure, the prices of goods and services are supposed to rise and fall with > a vendors strategies and tactics in relation to supply and demand. But the > "prices" of currencies are not supposed to do that, rather they are > precisely supposed to NOT do that. Because in a well-functioning and > efficient market for goods and services, autonomy over goods and services > prices vests with the vendors of those goods and services, not with the > programmers of forex algorithms and other speculative instruments who have > nothing to do with those vendors. > > Sure, in today's forex market the whole point of the "Speculation Use > Case" is volatility. But the forex market as we've come to know it since > the early 1970s is not serving the economic purpose of facilitating the > "Goods and Services Commerce Use Case". > On volatility, I have no idea if it's good or bad for bitcoin, but I suspect that if bitcoin grows, it will become less volatile. > > Joseph Potvin > > > > > > On Sat, Jan 25, 2014 at 9:06 PM, Melvin Carvalho <melvincarvalho@gmail.com > > wrote: > >> >> >> >> On 26 January 2014 01:17, Joseph Potvin <jpotvin@opman.ca> wrote: >> >>> >>> http://wcoats.wordpress.com/2014/01/25/cryptocurrencies-the-bitcoin-phenomena/ >>> >> >> Quite an informative piece. A few inaccuracies, such as he says that >> there's a 10 minute wait in the P2P network before a transaction is >> confirmed. Actually most transactions are pretty instant. >> >> This is largely an opinion piece. He seems to have a strong view on >> volatility being inherently terminal. I think there's a difference between >> inflationary currencies and deflationary currencies on this point. There's >> a long held view at central banks (in fact the ECB even made a cartoon >> about it) that deflation is bad. The theory goes that if something is >> deflationary people will hold on to their money before spending it, so that >> prices come down. However, prices continually drop in the computer >> hardware industry, and yet people still buy computer hardware. Similarly, >> when a store has a "50% sale" to attract customers, it does not mean that >> this is the only time they interact with customers. Inflationary >> currencies can achieve stability, but it comes at a price (ie the >> inflation). Dr. Bernanke has described inflation as a tax. >> >> I think there's room for both systems. As per the quote from the article. >> >> [[ >> "My expectation is that it will never achieve importance and that it is >> likely to vanish all together, giving way to more robust means of payment >> of more stable mediums of exchange. However, it deserves the chance to >> compete" >> ]] >> >> Most transactions in bitcoin will happen off block by trusted third >> parties as part of an IOU system. If these TTP's are firms they can (and >> do) comply with existing laws. I think it's a reasonable balance because >> you choose if you want to use a trusted third party for the fee they >> charge, or you choose to go to the block chain, for the fees that miners >> charge. >> >> >>> >>> Background: >>> Former Assistant Director of the Monetary and Financial Systems >>> Department, IMF >>> http://www.compasscayman.com/cfr/company/Warren-Coats/ >>> http://works.bepress.com/warren_coats/ >>> >>> Joseph Potvin >>> >> >> > > > -- > Joseph Potvin > Operations Manager | Gestionnaire des opérations > The Opman Company | La compagnie Opman > http://www.projectmanagementhotel.com/projects/opman-portfolio > jpotvin@opman.ca > Mobile: 819-593-5983 > LinkedIn (Google short URL): http://goo.gl/Ssp56 >
Received on Sunday, 26 January 2014 03:18:30 UTC