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Milton Friedman & undeniable beauty of proof of future spiral of death Q.E.D.
334 sats \ 19 comments \ @jk_14 15 Dec 2022 bitcoin
  1. Milton Friedman and his comfortable Truth:
"The one thing that is missing but will soon be developed is a reliable e-cash, a method whereby on the Internet you can transfer funds from A to B without them knowing each other." (1999)
  1. Milton Friedman and his uncomfortable Truth:
"Milton Friedman originally proposed a fixed monetary rule, called Friedman's k-percent rule, where the money supply would be automatically increased by a fixed percentage per year. Friedman, for example, viewed a pure gold standard as impractical. (...) if the growth of population or increase in trade outpaces the money supply, there would be no way to counteract deflation and reduced liquidity (and any attendant recession) except for the mining of more gold" ( https://en.wikipedia.org/wiki/Monetarism )
halving means: mining of less "gold" = strongly reduced liquidity (strongly reduced number of transactions)
reduced mining + reduced transactions = network security in spiral of death
Q.E.D.
Sad, but true. Tail emission is inevitable. And it's not a nice task to contradict pure facts... Even if:
"Nothing induces a bigger annoyance than the Truth" (every greater than me Bitcoin Maxi - should know that well already ;)
P.S. more here: https://old.reddit.com/r/Bitcoin/comments/xbiwli/let_microstrategy_run_antminers/
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358 sats \ 1 reply \ @pillar 15 Dec 2022
Tail emission is inevitable.
You might want to try with a less confident language (unless you are bringing an indisputable proof to the table, which you aren't).
Also, I'm adding the sentence that comes after your second quote and that you conveniently removed without proper notation.
[...] except for the mining of more gold. But he also admitted that if a government was willing to surrender control over its monetary policy and not to interfere with economic activities, a gold-based economy would be possible.
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10 sats \ 0 replies \ @jk_14 OP 15 Dec 2022
yes, I'm bringing:
reduced mining + reduced transactions = network security in spiral of death q.e.d. ;)
And even if all gold available to mine is finished - it doesn't affect security of gold already in circulation. That's the difference between gold and Bitcoin - that you conveniently missed, but I serve a proper notation ;)
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112 sats \ 2 replies \ @scottathan 15 Dec 2022
You know, I love the fact that you guys are brave enough to come on here and playfully mock our maximism. Although fixed supply may or may not end up being an issue for Bitcoin (personally I think we'll be okay, but only time will tell), thank you guys for coming in and discussing it.
At the end of the day, we likely won't see a world with just Bitcoin or just Monero. The two really have a lot more in common with eachother than with any other cryptos, so maybe our best way forward is to kind of have a stronger alliance between the two. A world where we have a double standard with Bitcoin and Monero similar to what existed with gold and silver is definitely one I would love to live in.
Regardless, there's my two sats on this debate
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5 sats \ 0 replies \ @jk_14 OP 15 Dec 2022
FYI: I'm bitcoin maximalist, too :)
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0 sats \ 0 replies \ @01xCc 15 Dec 2022
мы быстрее научимся обмениваться товарами чем биткоин успеет исчезнуть!
Ты точно будешь знать что сколько стоит... на этой основе можно сделать простой блок чейн... быстрее сделаем все товары взаимообменаваемые. Биткоин поздно или рано исчезнет.. но нам хватит на 2000 лет)))
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198 sats \ 3 replies \ @ek 15 Dec 2022
halving means: mining of less "gold" = strongly reduced liquidity (strongly reduced number of transactions)
Why reduced liquidity? The increase of liquidity is decreased. Not liquidity itself.
And even if: Why should a decrease of liquidity decrease number of transactions?
If there would be only one bitcoin in the world, we could subdivide it as much as we want and then we can have many transactions again.
I fail to see how liquidity and transaction volume are related in this case.
But definitely thanks for posting. We definitely need more consensus regarding this topic.
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0 sats \ 2 replies \ @jk_14 OP 15 Dec 2022
I fail to see how liquidity and transaction volume are related in this case.
Ok, then... Probably the easiest way to explain it - is using very old and well proven Gresham's law:
"Gresham's law is a monetary principle stating that "bad money drives out good" https://en.wikipedia.org/wiki/Gresham%27s_law
The better money is - the more people will do their best to hoard it. Hoarding means: avoiding of spending. Avoiding of spending will harm transaction volume and liquidity. As I said: piece of cake.
"if the growth of population or increase in trade outpaces the money supply, there would be no way to counteract deflation and reduced liquidity (and any attendant recession) except for the mining of more gold" - this conclusion is also done thanks to Gresham's law, of course.
And bitcoin is better and better money with every halving...
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193 sats \ 1 reply \ @ek 15 Dec 2022
"Gresham's law is a monetary principle stating that "bad money drives out good" https://en.wikipedia.org/wiki/Gresham%27s_law
You again - conveniently? - didn't include the next phrase:
For example, if there are two forms of commodity money in circulation, which are accepted by law as having similar face value, the more valuable commodity will gradually disappear from circulation.
Gresham's law only applies if bad money is accepted by law.
If this is no longer the case, the opposite is true:
Those examples show that in the absence of effective legal tender laws, Gresham's Law works in reverse. If given the choice of what money to accept, people will transact with money they believe to be of highest long-term value. If not given the choice and required to accept all money, good and bad, they will tend to keep the money of greater perceived value in their own possession, and pass the bad money to others.
https://en.wikipedia.org/wiki/Gresham%27s_law#Reverse_of_Gresham's_law_(Thiers'_law)
So no. People won't hoard bitcoin more and more. People will accept bitcoin more and more until other currencies are no longer accepted.
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0 sats \ 0 replies \ @jk_14 OP 15 Dec 2022
"pointed out that, during the great inflation in the Weimar Republic in 1923, as the official money became so worthless that virtually nobody would take it, people simply stopped accepting the currency in exchange for goods. That was particularly serious because farmers began to hoard food"
Even this wiki description itself clearly shows, that so called "Reverse_of_Gresham's_law_(Thiers'_law)" - is simply bullshit, and not a law by any means. It's just an artifact of Gresham's law in extraordinary market circumstances (so, exactly the case of Weimar Republic in 1923)
And in such ugly economic situation: the Producer of goods has such an advantage over the Buyer - that he is able to dictate in which kind of money customer should pay him for goods.
Why does he do it? Yes, you are right! Just because: he want to hoard best possible money, according to Gresham's law, of course.
Like farmers began to hoard food because they even food saw as a better "money" than worthless Mark - exactly the same way people will more and more hoard Bitcoin with every consecutive halving. Clear as crystal, sorry.
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21 sats \ 4 replies \ @01xCc 15 Dec 2022
пока это работает все будет норм... остальное не важно...
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5 sats \ 0 replies \ @jk_14 OP 15 Dec 2022
конечно ;)
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0 sats \ 2 replies \ @jk_14 OP 19 Dec 2022
NEVER EVER REPLY TO MY ENGLISH COMMENTS IN RUSSIAN LANGUAGE LIKE ABOVE
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0 sats \ 1 reply \ @01xCc 19 Dec 2022
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0 sats \ 0 replies \ @jk_14 OP 19 Dec 2022
please all delight an random russian troll aka internet "imperialist", LOL
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3 sats \ 0 replies \ @0260378aef 15 Dec 2022
You are missing the existence, in Bitcoin, of a very high quality of divisibility (one which is not expensive nor affects the, extremely cheap, verifiability).
Not to dismiss the potential security concern over finite inflation, but for me it's very clear that Bitcoin will never have inflation.
IMO: The only thing that matters about Bitcoin's inflation is that it was fixed at the start.
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1 sat \ 3 replies \ @om 15 Dec 2022
Monetarism is NOT the same as Austrian Economics. Bitcoiners are usually AE, for example, Saifedean is mosdef AE. So why would we AEs care about what Monetarists say?
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0 sats \ 2 replies \ @jk_14 OP 16 Dec 2022
Both Austrian and Monetarists lived in time where gold was a real thing, and there was no even concept of digital gold.
If all plain gold available to mine is finished - it doesn't affect security of gold already in circulation. That's the difference between gold and Bitcoin.
Imagine for a while plain gold mines, which are in the future able to mine only negligible amount of gold. In the real world it simply force owners to shut down unprofitable enterprices.
And in Bitcoin it must run.
If "digital gold mines" will be running only thanks to transaction fees, i.e. there is one part of users who participate and pay tax in fact for keeping them running - and there is another part of users who don't participate and they are just a tax free riders - that causes obvious problem, not only ethical.
Stakeholders (passive users) will have Friedman's free lunches on cost of active users. Btw, maybe monetarists were simply closer to digital gold concept, who knows...
Anyway, such pathological system definitely is not a part of Satoshi's vision. That's painly clear.
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50 sats \ 1 reply \ @om 16 Dec 2022
Stakeholders (passive users) will have Friedman's free lunches on cost of active users.
Not so. Hodlers' money can't be moved without their signature even in the case of a 51% attack. The miners protect the active users, therefore it's fitting that they should pay for it.
Anyway, such pathological system definitely is not a part of Satoshi's vision. That's painly clear.
Check out "The Book of Satoshi", chapter 5 "The 51% attack", verse... umm... verses are not numbered yet: "Even if a bad guy does overpower the network, it's not like he's instantly rich. All he can accomplish is to take back money he himself spent, like bouncing a check." ... etc
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0 sats \ 0 replies \ @jk_14 OP 16 Dec 2022
just a side note, if you were right, that there is no pathology in what I higlighted above - there wouldn't be such quite funny memes in existence:
https://i.redd.it/438h3b6hif221.jpg
free riders in its finest ;)
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