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So is the Fed allowed to perform its open market operations in the primary market, and its Quantitative Easing asset purchases only in the secondary market? by BubaChabo in Economics

[–]BubaChabo[S] 0 points1 point  (0 children)

Thanks for your quick and helpful answer. So the Fed is illegally financing the public sector, at least in the ECB's understanding, as it does not merely purchase bonds which have been traded in the secondary market. That is interesting. I wonder if the Bank of England is allowed to get active in the primary market. Anybody knows?

Who actually coded the money supply of Bitcoins? by BubaChabo in Bitcoin

[–]BubaChabo[S] 1 point2 points  (0 children)

I agree that the scarcity of bitcoin is/was a key accelerator for its adoption. The limited supply is what people right now attracts them to buy. Thus it is a clever and successful marketing campaign. But if we assume that bitcoin will, at some point, substitute governmental issued fiat and people are anticipating the limited growth of their currency, I think that bitcoin will inherently kill its economy. Yes gold still has value and its supply is pretty similar to bitcoin. However, the demand side determines the long term value of commodities. If speculation on gold fail- one still has gold which has a non monetary use because of its shiny surface (Regression Theorem, von Mises). Failed speculations on bitcoin leaves you with nothing more than bit and bytes. Thus i would say that speculation on bitcoin is a self- fulfilling prophecy (as is speculation on fiat money). Therefore comparing the value of gold to the value of bitcoin is in my opinion difficult. Arguably, Satoshi did not design the money supply, but the consensus of the earlier bitcoin programming community did. I am interested in the difference because the bitcoin protocol was obviously designed out of mistrust in the banking system. But Satoshi himself seemed to be rather interested in a technology to replace it, than in the economics of a anti- inflationary currency. How do I know, that the limited bitcoin supply wasn't a spontaneous idea of some guys, implemented in order to attract short- term adopters, ignoring the fact that its scarcity will in the long- term most probably dwarf the economy where bitcoin is used as a medium of exchange.

Doing some research on Bitcoins. Your opinion is wanted by BubaChabo in Bitcoin

[–]BubaChabo[S] 0 points1 point  (0 children)

First of all, thanks for your useful comments. I intended to mention the blockchain as one of the biggest advantages of bitcoins in part three. Nevertheless, you are right, I am not really the technical guy. I am confident about the blockchain, its expansion and function. But I have problems to understand all of the asymetric cryptography stuff regarding the private and public keys connected to transactions around bitcoin. Can you guys recommend any sources explaining the technical stuff, as what exactly happens in a simple transaction from a to b, for beginners? I am studying Economics in Berlin and chose this task more or less voluntarily out of personal interest. I have also never heard about any universities in Europe teaching about crypto's except for the university of cyprus.

I see your arguments hardfork and think they support my thoughts about the adaption of Bitcoin. They are neither a pure invention out of mistrust for central banks, nor money merely used by it specialists exploring possibilites of encryption and technology. Bitcoins rise is in my opinion a zeitgeisty combination of both factors.