17

GDP would accelerate because of less transactional friction.


12

Bitcoin itself, although conceived from an ideological background doesn't have an agenda. It is a tool. It will not solve societal problems by itself, but might help alleviate some issues, by providing competition to current solutions. Especially, wealth distribution in Bitcoin itself isn't better than in other currencies (see e.g. Business Insider on Wealth ...


7

If people are worried about deflation they really need to distinguish what kind of deflation they are referring to. Asset deflation or monetary deflation. The real issue with our economy right now is the fact we have asset deflation coupled with monetary inflation which is the worst of both worlds. I believe asset deflation along with monetary deflation ...


7

One thing often overlooked is that bitcoin is most useful in chaotic economies. Bitcoin likely will not replace the Euro, Dollar, Yen, or Yuan for very long time (if ever). However many economies suffer from poor economic planning and gross manipulation by central banks. Take the Zimbabwe hyperinflation scenario. If bitcoin existed and was easily used by ...


7

The upper boundary for energy usage can be described with a function of the profit and energy costs. Miners won't ever pay more for energy than they get from profits. The actual energy usage formula will also have to count for the hardware costs. The formula will look something like this : max energy usage = (profit - hardware costs) / energy cost per unit ...


5

How does it attempt to solve deep rooted problems in our society caused by globalisation and capitalism? It doesn't. Bitcoin doesn't contradict with capitalism or globalization. Bitcoin is not a political view or a set of society governing rules. It's a digital protocol for transfer and storage of value. ...geographic and social inequalities, ...


5

I'm going to answer your questions directly although I know you've selected another answer. It's for all those who come across this question. How do we know that the algorithm cannot be modified to gain control over the expansion of the monetary base? These are part of the config settings of the Bitcoin protocol. It can be changed but all you would be ...


4

Once upon a time someone used Bitcoin's ability to embed arbitrary text inside a transaction to put an ASCII Art Ben Bernanke into the blockchain. Referring to the fact that current blocks must still reference the Bernanke block as a "dependency" rounds out the joke.


4

The specifics of hardware (cost efficiency and hashing rate) are not very important. The availability of the most competitive mining hardware matters, but in the long run, the cost of electricity burned will tend towards the value of BTC granted to miners. obviously it won't quite get there (they have to return their hardware costs), but barring availability ...


4

I assert that this question is virtually irrelevant based on another assertion: Bitcoin is more energy efficient and will always be more energy efficient than the systems it intends to wholly replace. In both Bitcoin and the legacy currency and monetary systems, there is energy spent for some of the key tenets of a value storage and exchange system. ...


3

You can not make debts (no negativ values on your Bitcoin account). Liabilities are a major cause of poverty. At least in large scale (for countries having debts it is difficult to become rich). For the same reason: No fractional reserve banking possible with bitcoin (well, that only if the banks use the bitcoin system internally). I am no economist. Just ...


3

There is no guarantee that transaction processing, aka "mining", will always be attractive. As such there is no guarantee that the network 'difficulty' will always go up, it fluctuates. Therefore in a scenario, difficulty can settle at a value much lower than it is today, and/or specialized computers can become more power efficient. Bitcoin can also use a ...


3

As Bitcoin is a digital-specie currency, if it replaced all fiat currencies it would be the equivalent of reverting to a (digital) gold standard and can be answered in much the same way. Firstly, a gold standard is deflationary. Explaining this again and again is tedious, so I'll summarise: People provide goods or services to others and receive IOUs for ...


3

Bitcoins are economical to buy from many different currencies (ie the conversion fees are low), so they have the potential to make many financial & retailing tools available to a much larger audience. This could include stocks, bonds, commodities as well as traditional retail. Bitcoins also have the potential to change the way artists (in a very broad ...


3

Given that economists cannot agree unanimously on the global effects of relatively small events like a change in interest rates or a stimulus package, I would say that a major event like mass adoption of Bitcoin is far beyond anybody's prediction horizon. The global economy is a complex dynamical system and we really don't understand such things as well as ...


2

Bitcoin is made for transactions over the net and thus it is ideal for selling information and intellectual or informational services. How such an economy could look like is uncertain. My guess is that because bitcoin make decentral structures possible, it could support more equal power and opportunities. I am quite confident it would give many many people ...


2

Well, the GDP measured in bitcoins probably wouldn't grow at all, most likely it will shrink. However, that doesn't mean the economy shrinks, just that the bitcoins are increasing in worth. In deflation adjusted bitcoins, I think that the GDP will grow, and if only because micro- and international transactions are vastly simplified. However, I expect that ...


2

Because anyone can use logic and creativity to find bugs, and there is a serious amount of money to be stolen by finding such bugs. You can be very confident they are not in there, Bitcoin is too old for that sort of nonsense. It is only an enigma to some.


2

No, this is basically impossible. What you're saying is that we would have stable, predictable deflation that could be relied on. This is not possible because it creates a direct contradiction. Think about it -- which is worth more: One bitcoin today or one bitcoin next year? Clearly, one bitcoin today must be worth more because one of the things you can ...


2

One societal problem Bitcoin could solve is Prejudice by Country of Residence. For example, a vendor in India may have difficulty selling to an American company because the American company does not want to send their credit card number to India because this would expose them to unauthorized payments in the future. Since bitcoin payments are secure, ...


1

Welcome to Bitcoin.SE! Some interesting points that you raise. Bitcoin is more analogues to gold than more recent traditional banking. Yes, since power is used in bitcoin mining there are some additional distribution costs certainly. The distribution infrastructure exists anyway and in most cases is not being used to capacity ex-bitcoin, however, the more ...


1

There is not black and white answer here I guess, but here is my logic. Let's say that trust is a proxy of security and stability and satisfaction is a proxy of liquidity, usability etc. If we look at the extremes: if people had 100% trust in the USD, then they are less likely to look elsewhere for alternatives (holding everything else constant). Therefore ...


1

I don't see how this can be possible. Obviously you can look at the block chain to see the transactions that occurred, but since addresses are anonymous, there's no way to tell whether a given transaction transferred coins to a new owner (which should count toward velocity) or to an address belonging to the same person (which should not).


1

From what I gather, the deflationary aspects of Bitcoin are tied to the limited supply and lack of central regulation. I'm still learning about it but here is a collection of articles I put together on the subject: http://wayfinder.co/pathways/530d0adaa30064b367000088/an-economic-primer-on-bitcoin


1

Bitcoin was not intended to solve the worlds problems any more than the Internet was. It does however bring new question and thought to how society works, much in the same way the Internet does.


1

The rate of bitcoin production is set so that on average, regardless of how powerful the network is, a block should be discovered every ~10 minutes. If the network becomes more powerful due to new entrants to mining or better technology, the network will adjust (after a short lag time) by increasing the difficulty - and the same process would work in reverse ...


1

It is decreasing by half every 4 years, just that graph is just not showing it well for this short timeframe. The dip up until 2010 was due to there only being one or two miners in the entire network, so the maximum number of Bitcoin wasn't produced in that period. The speed of the entire network couldn't keep up with the minimum of 6 blocks an hour which ...


1

In a very short amount of time essentially all mining will be on ASICs. The BFL Jalapeno just shipped. That generation of ASIC will probably represent the majority of hashing when all backorders are shipped. That device does 5.5 Ghash/s and consumes 30W, per David Perry's first hand account of the one he received. Today the hashing capacity is 66 Thash/...


1

As one who has tackled the issue of transaction fees with the intent of lowering them I have to say that the way Bitcoin shifts all transaction costs to the buyers and sellers (separate currency, peer to peer, mining) is brilliant. As some of the comments have pointed out the real system resource use and cost Bitcoin incurs needs to be rightly quantified in ...


1

Millions of dollars every day will be spent on keeping the bitcoin network up. After all, it has to use 51% or more of all GPU power in existence - or else risk the entire economic system collapsing.


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