Only as a common frame of reference, and for your benefit at that. I, personally, have not experienced any such gains, in any context much less in US $. I would have to be willing to sell them for US $ to relize any such gains, and I am not so willing. If I can’t trade them for my wants, or give them away to my favored people, I’m keep them for myself. If Bitcoin crashes in value to zero, I shall lose what I have left and still be thankful for what I’ve gained in the meantime. You seem to go to great lengths to catch me in some kind of ‘gotcha’, with concern of your “Bitcoin is a US $ proxy” theory. The thing is, I don’t presently disagree with such a viewpoint. It’s a valid perspective. I do not, however, agree with the logic that such leads to the conclusion that Bitcoin could never decouple from the US $, nor that even coupled to the US $ means that it’s not a valid currency. There exist a number of fiat currencies that are intentionally pegged to the US $ that have existed and continue to exist, yet even pegged does not grant them immunity from the market forces of monetary exchange. Some have failed, others persist. None are not considered their own currency.
Its not a theory, its a fact. All goods and services are priced in dollars. Take any good sold in BTC’s run the dollar ratio/BTC ratio and you will see the good was priced from USD’s. There is no historical exchange ratio in BTC’s. There is on the other hand an exchange ratio for Dollars to Goods and BTC’s to Dollars.
sigh Okay, fine. Everything has a price in US $, so therefore every currency on Earth is actually a US $ proxy. Including the Euro. So what, then, is the US $ a proxy of? One could argue that it would be gold, but even that is lacking. More generally one could argue that it is energy (which has actually be argued by others than myself). So in a broad sense, all currencies are proxies for oil.
How would that change anything?
Orly? He starts with $10, spends $5 on 100 BTC and then he spends 75 BTC on 15 goods. He is left with 25 BTC, 15 goods and $5. That is a loss of $5, a profit of 25 BTC, and a profit of 15 goods. His original statement that his profits have not been in dollars is true. Your implied contradiction of his statement is false. There is no gray on this one, you are wrong, he is right.
Edit: Writing from phone. Corrected two numbers.
In order for something to be a proxy currency to currency X, doesn’t that require it to be pegged to currency X? That is, if some medium of exchange has a variable X:USD ratio which fluctuates in response to market forces doesn’t that mean, by definition, it is not a proxy to the USD but rather an independant currency in it’s own right? If this is not the case then I don’t think I understand how you are using the phrase “proxy currency”.
As stated previously, would the EUR, GPB, RMB, YEN, etc. all be considered independant currencies because they are not pegged to any other more popular currency or would they be considered proxy currencies to whatever preceded them, even though they are no longer pegged?
I honestly don’t think of the worth of my bitcoins in US dollars because I’m not interested in selling my bitcoins for dollars. I think of the value of my bitcoins in terms of the amount of services which I pay for using bitcoins. Why would I want to sell my bitcoins? I have enough dollars and I can’t buy in dollars what I buy using bitcoins. What is the one thing you can’t buy using dollars? Anonymous (legal) remote services. And that has great value.
That is not a fact, that is verifiably false. Sure, people who sell products which they have purchased using their national currency are probably going to peg the price of their products in bitcoins to however many bitcoins they can sell for the amount of their national currency that they spent on the items, but products purchased with national currencies are not the only products available. Not only that, but if lots of people come along and start using bitcoins pegged to their national currency, the value of bitcoins increases becasue there is a limited number of bitcoins. Also, many people provide services which are not at all pegged to anything but their altruistic desire for bitcoin to improve human society. Professional services are provided at a fraction of the prices that those professionals charge in their national currency. There are also people who are curious when they see Bitcoin mentioned on the Internet and then go and buy a few bitcoins using dollars or euros or pounds or digital gold or yen or rubles or whatever other currency. When one person does this it has no effect on the value of bitcoins, but when lots of people do it, it increases the value of bitcoins in dollars, euros, pounds, digital gold, yen, rubles, goods and services. Bitcoins are an international money regardless of how many times you state that it is a fact that they are not. I’ll take common sense intelligence over scholarly stupidity any day.
And to the moderators: The worst language that has been complained about in this thread is common place on this forum, so how about instead of promoting a double standard of threatening to ban people with whom you don’t agree while encouraging people with whom you do agree, you instead first get your supporters to lead by example? Go ahead, Google site:mises.org naughty words.
Besides labor, which one could argue has costs like rent and food, which service provided with Bitcoins doesn’t have inputs that are paid in dollars?
That’s not an argument or a set of facts. It’s just an opinion. We all have them. They don’t add any objective truth, only YOUR point of view.
I’m not really concerned with your accusations of a double standard. If you don’t like the standard here, leave. If you see a problem, report it.
So now there is a learning curve before using BTC’s? Doesn’t sound like a medium of exchange that is very accessible.
The verification and accounting of bitcoin transactions. Less importantly, 8511.96 BTC for a one minute, fourty-four second animated video. I assure you that nowhere near $8500 was paid for that animation, but if the author wants dollars, he can get close to that much for it today.
Aside from it’s function as an alleged “medium of exchange” for what purpose would I chose to carry BTC’s?
Micah I will concede one point to you. If me and my buddies make a closed circle of trading special trading cards that I print in my basement. Lets call these cards Better Trading Currency, we could exchange any good we demand from each other with these cards. We could all agree to these rules. By your standards I have just created a new currency. Thats what BTC’s are, a closed group of hobbyists essentially trading cards(BTC’s) with each other. By your standards this a money.
What I am talking about when I refer to currency and money is the most vendable good. The most liquid of goods is money. This establish’s the most reliable historical record of exchange ratio’s available. BTC’s is not the most vendible good and thus far no one has bothered to explain to me how BTC would ever even get to that point.
Further more all goods priced in BTC’s are actually priced in dollars and converted to BTC’s. I already cited an example of a graphics card. The BTC price is the same as the dollar price on newegg. Beyond that all of the accounting done in all of these firms who trade in BTC’s is actually done in dollars. If company’s had so much faith in these BTC’s they would try and do as much of their accounting as possible in BTC’s, not in dollars.
Economic calculation thus far is still in dollars, not BTC’s.
How bitcoin works internally has nothing to do with its ease of use for the end user.
You can cite an example of a company who’s accounting is done in BTC’s? How does a vendor know that selling a graphics card at 70BTC’s will give him a profit?
I noticed you are annoyed my tone. I apologize but I need to point one thing out. I have already given everything here ample enough explanation and you guys seem to be demanding more of my time. However it’s very clear that we are going in circles. Most of the BTC crowd has repeated themselves on several occasions.
I will not invest a great deal of time explaining everything I have already explained a second time around. Especially if the information falls on deafs ears. At any time you like your welcome to agree to disagree with me.
If you think I am being rude please point out where that was the case. I beleive you can do so at the members forum.
I just thought it was really strange that you said.
Sounds a bit esoteric to me.
C++, Cryptography, Statistics, Real Economics
I believe you missed the point. I wasnt refering to it’s core mechanics.
What do you mean by “Real Economics”?
facepalm
You will forgive me if I find this obviously lacking.