Pyrian said:
"Extremely unreliable"? Please. Compared to what? Certainly not gold or bitcoin. Really, we could use a drop in the dollar. Having an overvalued currency is nice for buying cheap stuff from abroad, but it kind of sucks for trying to be competitive in the international market.
Well, you got me here, there is no realiable stable items for pricing. The most stables ones seems to be the rare metals that are less prone to speculation (basically all but gold and silver which si where specualtors are concentrating most of the time).
While having low currency value does help your exports, it is the countries that have high currency value that seem to be doing the best. However i agree that US needs to increase its exporting amounts, however they alraedy had a drop in the dollar, and quite a big one.
Scrumpmonkey said:
Bravo. You join the group of people to win my "Fundamental misunderstanding of currency" award.
Stable currencies do not just run on faith, I've explained this before in previous bitcoin threads, they are backed by central banks. The pound and the dollar do fluctuate but The Bank of England and the Federal reserve have power to respond. Central currency controls are what make a currency stable; the Pound for example is backed up by the Bank of England and has the full support of the treasury and is given credibility by the entire UK economy. Without these supporting factors the £ and the $ would have died long ago. What did the Federal reserve do when the financial crisis hit? It bought up billions of dollars worth of bad debt to support the economy and it lowered interest rates. A central bank can act to counter destabilizing forces as can a government.
Central banks, Strong GDP, currency reserves, economic policy, confidence in an economy, interest rates; these are the difference between the imaginary bitcoin and a real currency supported by the weight of a country. Bitcoin is an unregulated COMMODITY. It is not, by any definition apart from its own, a currency.
Anyhone who has ever invested in a bitcoin believing it to be the same as a safe real-world currency needs to take economics 101 again.
Thank you for the award but i may have to return it.
Currencies run on faith. All of them. the only part of currency that could be considered backing is the smallest denominations of cash perhaps (for example 1 cent actually has 1.4 cents worth of iron in it). Central banks can only back very small amount of the currency they have put out in actual reserves, and even then vast majority of those reserves consists of nothing but other currencies. The banks do try to regulate it by regulating the amount of money in circulation thus increasing or decreasing the turaround speed and they also used to regulate the money multiplicator factor, alas due to the recent crysis that mostly went to "as high as we can" level. Just because there are actions to stabilize the value percieved does not mean that there is intrinsit value behind it though.
I should remind you however that Central Banks are
private institutions that do not own countries economies, so no, its not backed by whole economy. In fact quite the opposite - the economy is backed by the currency. a currency that is based on faith.
All currencies are commodities. Its simply ones that have no actual value of their own and instead are used as a middleman between natural trade. thats what they were invented for. Since Bitcoin also has no intrinsit value and is used for middleman between pruchases of goods and services, it is very much in the same category. Its backing is different, granted.
I agree that Bitcoin was never a "SAfe investment", but then, noone here was claiming that now were we?
Icehearted said:
I don't get how Bitcoin works. Who decided these were worth anything? Why has this gone as far as it has with businesses accepting this new and very volatile "make-believe" currency? It's just got Calvinball written all over it and I'm genuinely baffled at how this all actually translated to real currency in the first place.
Pardon my ignorance.
just like with any other currency - WE decide how much it is worth. As far as business accepting it, popularity would be my guess, they wanted to look hip and new and catch the "internet crowd". this never works but companies dont learn.
The translation is simple: you give company bitcoins and they give you dollars. Why you ask? because they THINK its worth it.
I remember reading all about this once, maybe nine years or so ago, where someone broke down the reasoning behind the value of gold in the first place, which if I remember right was akin to the diamond cartel inflating the price of diamonds despite the fact that they are very common and very easy to replicate. He wrote that gold is not as conductive as other metals like silver, and he wrote that it had to do with amounts and rarity above and below the surface of the earth. He then added that silver was in actuality rarer than gold and therefore should be a more precious metal.
If I understand Mister Chippy, the sense here is that it's only valuable because someone at some point just decided it was, kind of like diamonds and Bitcoin. That actually sounds about right to me.
The gold that we put for shinies price is very much a cartel akin to that of diamonds. were talking about industrial gold here however, and that one has different value and is the item thats traded in international markets usually. while silver does have more electroconductivity, Gold is much better at being streched out into think layers without loosing its structural integrity [http://www.munknee.com/a-direct-comparison-between-gold-silver-platinum-and-copper/], which makes it the choice metal for microelectronics that measure in nanometers.
Wast majority of golds prices and the artificial rarity comes from two factors mainly:
1. hoarding. there are plenty of institutions simply hoarding gold sitting on it. this removes it from circulation and creates scarcity. and they count in billions.
2. speculation, but that bubble seems to have finally busted now.
CriticKitten said:
Oh dear, you again. Do you ever research your claims, or do you just keep insisting that it's everyone else's research that is wrong?
Given our previuos encounters and your lack of knowledge what a source even means as evident By this thread [http://www.escapistmagazine.com/forums/read/6.842205-Zero-Punctuation-The-Legend-of-Zelda-A-Link-Between-Worlds?page=6] you are not the one to make any claims here. Therefore i chose not to respond to your accusations.
