Bitcoin & the crypto-currency revolution. (get some here).

[GrahamH]

Sure, but that's not the point.

By the way, I apologise to Skepticus for being a bit testy in my last response to him. Stress is messing me up at the moment.

Can you suggest any economic growth that is not limited by natural resources?
Doesn't the size of any economy ultimately depend on the number of consumers (total consumption)?

[pErvinalia]

I thought I already had.

Regarding the second question, I'm not sure. I'm also not sure what the relevance is.

[Svartalf]

Depends, a small number of humongously wealthy consumers can drive a whole economy, especially when they also practice largesse... just look at pre renaissance medieval economies. Those were driven by the royal and lordly courts and generally by the tiny minority of Noble/Clerical wealth holders.

[GrahamH]

Depends, a small number of humongously wealthy consumers can drive a whole economy, especially when they also practice largesse... just look at pre renaissance medieval economies. Those were driven by the royal and lordly courts and generally by the tiny minority of Noble/Clerical wealth holders.

You can't practice largess without consumers of the stuff you give away. If you give away things nobody wants is that an economy, or a form of fly-tipping?

It is surely only an economic where the recipient is prepared to pay, in one way or other, for a good or service received. Feudal largess may buy loyaty, and the maximum value of such a transaction is set by the number of otherwise rebellious serfs prepared to consume the gifts in 'trade'.

[Svartalf]

Just the courts and Church drove a large economy for luxury goods and the construction sector... and that's not taking in the consumer pool for the occasional largesse.

[GrahamH]

Just the courts and Church drove a large economy for luxury goods and the construction sector... and that's not taking in the consumer pool for the occasional largesse.

Sure, but where did they get the wealth to procure those goods and services? From taxes and tithes of the people who had to trade their labour and resources to meet their wants and needs. The potential for growth in the cathedral building business is not infinite. The potential for growth in the singing lesson business is not infinite. The basis of economics is human trade and people have limited capacity to produce and consume. The limit varies, with technology, and ease of access to resources, but it can't be unlimited.
Some thing like TV entertainment is limited to viewing hours, and competes for time with other activities (e.g. singing lessons & sleep). It is impossible to expand TV programming indefinitely (even though it might seem there is endless willingness to pump out crap TV, it must have limits, set by the number of viewers, and consumer-limited advertising)

[Skepticus]

* lots of stuff *

Thanks for that response, Skepticus! That's useful stuff - I appreciate it.

You're welcome bro. If you download a wallet app, or sign up with an on line wallet site like coinbase and post a bitcoin address here, I'll award you 0.1 BTC for a constructive and thoughtful contribution to Q'n'A.

[PsychoSerenity]

The thing I can't work out is if you are a true believer in everything you are saying about it, or if you have a particular vested interest in getting people to join up.

You go on about "greedy, filthy rich capitalists, manipulating the system" and how bitcoin somehow avoids that. Are you aware that there's already a bitcoin hedge fund operating from a tax haven?

I have no doubt that some people are going to acquire millions from bitcoin, but it won't be ordinary people using it as a currency, it'll be the already wealthy using speculative trading tricks to rip everyone else off.

[Pappa]

The one problem I see ahead with bitcoins is that the ability to mine them is proportional to the amount of money you're willing to spend on hardware. At the moment it's a reasonably level playing field, but with dedicated Bitcoin miners now starting to appear on the market, it won't be long before wealthy people start buying a room full of dedicated miners and churning out masses of coins. Once there are people with large stocks of coins, there'll be lots of speculative trading and the bedroom Bitcoin miner, eeking out a few fractions of a coin as part of a pool will be left a little out in the cold.

Or am I missing something which would prevent this?

[Skepticus]

Sure, but that's not the point.

By the way, I apologise to Skepticus for being a bit testy in my last response to him. Stress is messing me up at the moment.

Didn't seem so testy to me bro. Anyhow, you're presenting issues as you see them and making me think (and visit Wikipedia), as well as a substantiative contribution of empirical facts re: economics (whether I agree or not). I will have to get back and read through your last post, do some research and see if I can divulge where we diverge. I think we are slightly debating at cross purposes there, but I will have to give it some more consideration. Anyhow for your part in the dialog, I will also award the 0.1BTC if you want to get yourself a wallet (on-line account or downloaded app), then perhaps you might put it towards some of those 'special' on-line goodies you're so keen on. Maybe I shouldn't encourage trading in 'certain' things with bitcoin, but I might do a post, just as a basic guide on the fast track to using TOR/proxies/encryption, in the interests of keeping good security anonymity practice. We've learned how to send a new type of money over the net P2P; It's just a shame I cant send a couple of beers over the net to notch the stress down a little.

Cheers mate. Keep that chin up.

[pErvinalia]

Cheers mate. I'm probably going to be offline for a little while, while I try and get an internet connection at my new abode.

[Skepticus]

Note: I realise I digress somewhat in this post but an underlying misconception about the fairness of the significant value increase arose in my meandering mind and it seemed to need clarifying. I may have also been thinking of another post that approached the same issue. Apologies in advance.

The thing I can't work out is if you are a true believer in everything you are saying about it, or if you have a particular vested interest in getting people to join up.
You go on about "greedy, filthy rich capitalists, manipulating the system" and how bitcoin somehow avoids that. Are you aware that there's already a bitcoin hedge fund operating from a tax haven?

Ok. I appreciate your concern Psyco. But I did declare from the outset that I had some vested interest (very minor league FWIW) in bitcoin as an early adopter. Above all else, I do have a passionate belief/understanding that the existing money system is corrupt and unsustainable, and I should assure you that my philosophical interest is in accord with my passionate love of open source software and libertarian ideals, which I held long before I discovered bitcoin. The truth is, I had a few hundred bitcoin in the early days, but I have frittered away some and shared my gains along the way. If we didn't spend bitcoin to encourage commercial adoption (or even cottage industry) and charity also, by just using bitcoin as a form of money, then it might have dwindled as a currency anyhow. I cant imagine being Gavin Andresseen, who joined bitcointalk.org exactly a month after me, and went on to become the lead developer. Gavin initially bought a couple of thousand bitcoin , when they were below 10 or 15 cents, and as a public benifit, set up the bitcoin faucet, a website where visitors could go once a day, and be given a very small amount of bitcoin to play with. Over the first couple of years or so, Gavin's bitcoin faucet stock, dwindled to a small fraction and not until the prices hit more than double figures (tens of dollars), did anybody begin to realize the potential value of their prior benevolent efforts. People believed in this mighty experiment, well before it began to prove itself as serious commodity to speculate with and from the time bitcoin was below $1 prices, till the first bubble that went up to $32, there was a dedicated idealistic community of passionate developers, enthusiasts and contributers who were almost exclusively motivated by the ideals of the libertarian ethos, and the principals of open source code and mutual voluntary cooperation.

I still have a few bitcoin, but I'm more into finding ways to earn it in trade and encourage liquidity and stability. The vested interest for most bitcoiners who are not hoarding, speculating or minning (very much the larger majority), is in the entrepreneurial possibilities and the genuine ethos, that this thing is going to change the world. People are feeling a sense of community and liberation, much like the settlers on the western frontier. The optimism and enthusiasm is infectious, as the innovation potential is mind boggling. Of course it's lucrative. Thats just an inevitable factor of it's technological superiority. Of course people with money will make in roads and leverage their existing wealth. If you were a gold miner in the olden days, you might either take to the riverside with little more than a pan and a tent, or you might invest in a lease and have somewhat more efficient equipment. That's just business but unlike the fiat economy, bitcoin offers no means (that I can see at least) for a person with ten times as much capital, to profit 50-100 times as much. The profit potential from simply buying/earning some bitcoin (however you manage to do it) and saving it to make gains on the rising value, is still quite proportional to investment.

Having toiled for the first couple of years with no promise of serious return, and only the dim hope of a groundswell large enough to drive sustainable momentum, the early enthusiasts endured with their labor of love, which very few understood with enough foresight, to recognise the earth shattering implications which bitcoin has for society; nor the potential scope and breadth of the demand for bitcoin. A significant demand as some did realize, could make wealthy people of the early investors and miners, if they happened to have kept more of their dividends than they spent. Even miners though, had to buy hardware, develop and/or the software and administer the network their systems. They also went through shifts in energy, hardware and hashing power economics, as the difficulty increased and the software/hardware demands grew. Not until quite recently did the market price peak sharply at the time of the Cypriot financial crisis. The market value has grown to date, more than another order of magnitude. It's very easy now, in retrospect, to lament that those early adopters got to 'cream off' inordinately lucrative rewards, that seems unfair. But the keepers & savers, were risking their stockpiles of bitcoin to the possible failure or dwindling of bitcoin if the experiment failed. Anytime you sit on an asset, you are exposed to the market and at risk of a down turn. At any moment you are entitled to trade out, hold or stock up. So is anybody else. If bitcoin had petered out, the folks like myself who spent a larger proportion of their coin along the way, would have come out on top with their goods and services bought at a relative premium.

Whether it was a week after bitcoin was released or right now, the price IS what the price IS. The rapidly appreciating market value of bitcoin, is a product of the fixed tapering supply and that the number of people who adopt bitcoin is increasing. Again that Is how money SHOULD be. People BENIFIT from a money supply with a fixed total amount. The devaluation of fiat is a lamentable disgrace. I'm ashamed of myself before any other blame be foisted, for not ever trying
to understand how the money system works and being as complacent as everybody else, as we plunge towards inevitable catastrophic failure. In any case, the concern about how earlier participants had an unfair advantage, can be applied arbitrarily to any period of similar duration, throughout the course of this whole adoption phase. While the overwhelmingly vast majority of people are yet to adopt bitcoin, if they (or even a sizable proportion of the population) eventual y do, we will continue to see a trend of overall growth in it's market value. So then, If you Psyco, were to put say a thousand bucks worth of savings away in bitcoin over the next year, and (this is hypothetical of course), supposing that the price were to increase another two orders of magnitude over the following three or for years, some other beleaguered, victim card carrying bitcoin dissident, might lament the same 'unfair' disadvantage. They would probably also preface the complaint with a similar chunk of history, that delimits the possible duration of investment and potential gain, with an entirely retrospective analysis. Like the actually case of the past four years, the complainant might only notice that certain profits were made and that they were lucrative, never considering the risk that you had taken on and the fact that your investment was never assured with anything like certainty, let alone that you could count on a 1000% dividend. Likewise the complaint that this person missed out, will seem to imply that bitcoin was not available and open to them at the same time you became involved.

Another way to look at this 'unfortunate' appreciation of value which has left some with a , is the reductio ad absurdum. If it were some sort of misgiving or flaw of bitcoin, that rather bullish appreciation were potentially somewhat possible, causing anybody who came along in the early(er) days to make very significant gains; I might ask myself, would I think 'Hmmm... this currency might appreciate so much, so fast, that if anybody holds too many bitcoin, they could become quite well off unexpectedly'; so - in light of the fact that lucrative gains might be possible (beyond my means to speculate wildly let alone predict at the time), I should run the other way, as I'd hate to see people becoming wealthy because they made a wise investment and participated in the foundations of a revolution in the monetary system of humankind? Does it not even feel like a wee little bit of a straw-man Psyco, to confound these two scenarios. On one hand we have the deliberately corrupt, fraudulent, cheating thieving tactics of the fractional reserve banking consortium and the government pandering and complicit endorsement. To say nothing of the shameless plundering of taxpayers to subsidize, underwrite and reward this egregious boldfaced state implemented looting. All this in the face of unmitigated, systemic failure intrinsic to the banking cartels, owing to, currency debasement, exponentiating debt, and inevitable credit defaults, in a system by design sweet fuck all, more than the purest and most insidious greed motive, at the black abyss, of it's toxic, evil little heart. On the other hand, we have a carefully designed alternative money system and autonomous currency, that was launched as an experiment with optimistic but realistic hopes that it would grow popular enough to provide a ubiquitous free-market economy, resilient to central control (with it's inevitable intrinsic, propensity to be manipulated). A new egalitarian, consensus audited, peer to peer currency, for the people and by the people, and which people could use autonomously.

This system called bitcoin, becomes a rather live wire success and it's desperately need autonomy and subversive potential, engenders a rather more sudden groundswell than might have been expected. As a result of purely ethical above board free-market economics of supply and demand, the price responds to demand (a feature that was intended, to outstrip supply) - exactly because that is what currency needs to do, so that the citizens who hold it, are not loosing value. Somehow then, this unprecedented success in currency value appreciation, growing in value with more than an order of magnitude of surplus performance than needed to sustain it's viability, is supposed to apologize for succeeding, because it is doing what it was supposed to with miles to spare. Lets clear up a little distinction here. What I have by way of vitriol and scorn for banks, is motivated by their willful and calculated greed and corruption. It is not because they happen to be managed by wealthy people, who succeeded in a fair and honest management system, within a level playing field; because obviously theyre not. I don't tend to decry the laissez faire economic model of free enterprise and competition. I don't tend to decry success, even in the capitalist sense of financial wealth. If I gave that impression, I hereby retract it and apologize for any confusion. But the property of it's success that allowed any degree of wealth to be accumulated in the bicoin economy, is precisely the kind that is born of an unmanipulated market response to supply and demand. This demand generated by citizens, is making bitcoin a valuable unit of trading. This is happening at the behest of investors/buyers, those being the people who dissagre with the naysayers and instead bid to put the price where the market collectively want it. The price is a running consensus. It is ironic that any criticisms are leveled at bitcoin based upon dissent of it's price. The 'some people got rich' ballyhoo, is effectively an argument that the price is too high. It's as if to say, 'a bunch of other people decided to put confidence (at their own risk) into a commodity, while I sat on the sidelines expecting to get an equal reward without having invested'. Interestingly if the price were on the low side, the critics would decry that result instead and declare that bitcoin won't succeed, while pointing at it's sluggish performance. The whole point of a free market, is that there IS no such thing as a 'wrong price'. A thing is never worth more or less than what somebody is willing to pay.

If the rate of appreciation is to high then the people buying bitcoin at the present time, dont seem to be bothered by this. It's a self effacing argument that bitcoin is to valuable to be worth anything. That's remnicent of the Yogi Barra principle, which states: "Nobody goes there any more, it's too crowded". If you want to test the fairness of the bicoin value model, you might like to get some bitcoin of your own. You will find that appreciation happens to yours at just the same rate, as it does to mine or anybody else's.

As for hedge funds and tax havens. Yes of course. You can use bitcoin in the same way as cash except that it's digital. I'm also aware that there are websites on the darknet wherein you can by drugs with bitcoin. So what?

You can also buy drugs with cash. In any case. Money isn't supposed to make decisions on what it is used for. I do seem to vaguely remember hearing about off shore tax havens and such before the advent of bitcoin. Hedge funds are the stuff of written documents, rules and contracts. They are not a part of the bitcoin protocol. National or state boundaries and geopolitical borders, are just lines on maps. Bitcoin likewise has little to do with them except indirectly, as a potential means to abolish states and oppressive political hierarchies. I.e. They could be starved out of existence, if they refuse to take responsibility for the mess they've made and resolve problems that threaten the existence of the whole human race. Bitcoin itself exists as a ubiquitous distributed database, so the only thing that is actually IN that tax haven, is the legal agreements and contracts that establish the legal structure and bullshit regulatory compliance to satisfy the local jurisdiction. The bitcoin that it uses to transact, is actually on the block chain (the bitcoin distributed database). So I have a copy of all those transactions right here on my own harddrive. Bitcoin has no jurisdiction. That's kinda the point.

I have no doubt that some people are going to acquire millions from bitcoin, but it won't be ordinary people using it as a currency, it'll be the already wealthy using speculative trading tricks to rip everyone else off.

I can assure you that there are quite a number of very successful bitcoin millionaires and multi-milionares already. This time, the spoils are to the innovators and market makers, who were the geeks developing important infrastructure and entrepreneurial ventures that are changing the face of the Internet and the world at large. These grassroots heroes are the likes of Eric Voorhees (from a video posted earlier in this thread) .You might also like to check this out.

Perhaps you could elaborate on these speculative trading tricks. How are they excluded in practical terms (using bitcoin) from the everyday joe and what he can do? Not to deny that it's possible, but I can't see how. You do understand that bitcoin is peer to peer and the exchanges are just places for matching asks with bids. Some allow shorting and such trivial tools, but nothing everybody can't use. Exotic implements like credit default swaps and such, traded on wall street are all complex math on paper derivatives that rely on the stacked deck of the financial market, which can only trade on government fiat. Those guys make their own rules, but only because they can control fiat currency. How any unbalanced or corrupt privileged trading in bitcoin can be established is not clear to me. Again. The already wealthy may be able to buy more bitcoin by 'virtue' of having more money in the first place but without any way to stack the deck, their bitcoin will not be able to do more per unit than anybody else's Meanwhile, if they wish to get into bitcoin, they wiill necessarily drive demand up for the existing coin holders. If you seriously believe that any appreciable amount of wall street money is due to be cashed in for bitcoin any time soon, then I'd highly recommend you invest in a little bitcoin nest egg.

[Skepticus]

The one problem I see ahead with bitcoins is that the ability to mine them is proportional to the amount of money you're willing to spend on hardware. At the moment it's a reasonably level playing field, but with dedicated Bitcoin miners now starting to appear on the market, it won't be long before wealthy people start buying a room full of dedicated miners and churning out masses of coins. Once there are people with large stocks of coins, there'll be lots of speculative trading and the bedroom Bitcoin miner, eeking out a few fractions of a coin as part of a pool will be left a little out in the cold.

Or am I missing something which would prevent this?

Pappa, let me ask you this. How does the ability to 'mine' USD cash affect that currency? Unless somebody wants to be a miner, the mining thing doesn't even enter the equation. If the price goes up, then more mining rigs are possible, so the number of miners increases to take advantage. Then the difficulty goes up as the share of coins being mined is spread that much thinner. If the price goes down, less efficient mining rigs will go of line, reducing the difficulty. There's an equilibrium that is established between the price and the difficulty. Wealthy people are welcome to buy lots of hardware for mining but it isn't going to earn them a proportional amount of coin. That's because the supply is constant (albeit halving every four years aprox). Of course, nobody needs to bother about it if they don't care about mining. To the consumer they only need to know that 25 bitcoin will be released into circulation every10 minutes approximately, which makes the supply stable. I haven't really bothered much with mining since ASIC's came out. I only have one Butterfly Labs Jalapeno, which I received 8 months after my pre-order (bad mistake). FWIW at about 7Gh/s I might just as well have bought a mouse on a treadmill.

There may be people with large stocks of bitcoin, but they won't get them any easier than anybody else per unit of money invested. It's the equilibrium you see. At some point you would be better off just investing the money into buying bitcoin directly. Even then, those bitcoin bought by wealthy people, will appreciate at the same rate as everybody elses. So there's really no 'inside track' for the wealthy. Speculation is fine also. Hoarding (or saving) bitcoin might return a handsome profit, but the moment you spend it, it ceases to be savings. Saving bitcoin just keeps part of the supply out of circulation, thereby driving up the value of everybody else's bitcoin. I'm totally down with that. The supply side of bitcoin is the really clever bit. Never underestimate the genius of Satochi Nakamoto.

[Azathoth]

Any chance of writing a little bit less at a time skep?

[Skepticus]

The big problem with this model, of course, is the requirement for never ending growth. It's debatable whether that is even possible. It's highly unlikely it will be possible.

You actually think this is "debatable?"



It's not even remotely debatable. It's an obvious and overwhelming no.

The issue is that not all growth is linked to physical resources.

Growth! Economic growth, is ALL linked to and constrained by physical resources of the natural world.

No it's not. If I give singing lessons to my neighbours, that isn't particularly linked to any physical resource usage. Of course, we can't divorce all economic growth from physical resource usage totally, but some forms of growth use FAR less resources than other forms of growth. Treating all forms of economic growth as the same is not rational.

Ah! Here's where we have a little problem. All human activity could easily be translated into time or even shit. The manufacturing sector does use natural resources, but it only does so because it has humans to supply. In the car factory there are thousands of workers who are trading their time/services for dollars. In that light, you can look at the car factory and say that it mostly consists of human activity. The problem with the car, is not only that it uses raw material, but that it requires a whole bunch of human activity to produce it's goods. Even if they could fully automate the factory, then we can look at the amount of resources being consumed in car manufacture, as a product of human activity. The cars are sold to people. Ultimately the demand for resources used by the factory, is translated to demand for cars. In our society, even piano teachers tend to drive cars. Having more piano teachers won't decrease the demand for natural resources. It's human activity that creates the demand for resources, and ultimately the higher the population the higher the resource drain. The economy is measured in terms of GDP, but most of that product is made out of human activity. Most manufactures employ lots of people to do stuff. We can say 'oh that factory produces way too much stuff, look at the raw material it uses', but then you might say 'yeah but that OK because most of what it costs to produce it's cars, is spent on services'. Even the employees in conventional industry are service providers. They too sell their service to the employer for a wage. The problem is not how many dollars are spent on products, or raw material, or even what is the ratio of product to service as you see almost all the cost of a product are service.

Try this: If we could get every manufacturer to automate away ALL of the jobs and somehow find a way to support those workers with equally lucrative jobs in the service sector, while the population remains the same, then what would that do to reduce the resource drain? Everybody would consume the same (we didn't change that) and everybody would spend the same (we said they had the same wages). Their lifestyle may be little different and the amount of stuff they would consume would be no different either. Therefore the amount of burden they place on the resource sector, demand for raw materials is exactly the same. It's what people CONSUME that creates the demand. It's not a supply side problem, its a demand side one. It doesn't matter a tinkers what they do in life to earn a crust, in order to buy and consume those goods that are made out of raw material, they will create a demand. Noting that a service based company (say a legal firm), does little to place a demand on material resource consumption, because it requires little in consumable stuff, is wrong. It pays people in it's employ for their service to the company and those wages are only about a week away from being used for conversion to stuff that they will consume.

Even more so now with our service (including financial) economies.

Are you kidding?

No. Financial services produce less CO2 and use less resources than steel or cement production. I'm not sure what's so strange about this concept to you.

Financial services are provided by people who are ALL CONSUMERS. As I said you could measure the GDP in shit just as easily as dollars. Accountants eat and shit too. They also drive cars, and some even learn to play piano, but the piano teacher also eats and shits. We cant be all teaching each other or mowing each others lawns. You can't significantly change the ratio of product to service consumption, as no matter how many people go into the service sector, it does nothing to change their material needs. Growth in the service sector alone from previous population growth that now seeks employment, will only contribute more people doing stuff to pay for stuff. Consumers; people who eat and shit.

What's worse their contribution is actually not as tangible or as easily justifiable in terms of the practical resources we need to live. We could do without another gossip columnist or interior decorator. But a potato farmer is a provider of stuff; (stuff we need or at least can easily justify). The potato farmer we can live with and their agriculture industry is vital to society. The 'growth' areas that only provides services (help) that adds cost to living without necessarily adding value to the end product (like advertising and marketing), are the first places to look for efficiency benefits, when the economy slumps and the fat needs to be trimmed.

I agree with you on this, and this is why I mentioned the hoodoo thing below. But it has nothing to do with the discussion. Treating all growth as the same is fallacious.

It has every thing to do with the discussion, as in economic terms everybody in every industry is ultimately both a service provider and a consumer. That is we do stuff (services) that others will pay for, to get money so that we can pay for stuff. growth in any sector, if it is overall growth, can not be sustained without increased consumption of consumer goods. How exactly would we plan for an expansion of say 10% in the services sector, without any of that new productivity (in terms of profits and wages) being spent on consumables, but instead being spent on services. As soon as any product or service is converted to money, all bets are off. There is no way to control what that money gets spent on, not unless you control the money itself and introduce insidious problems that distort the level playing field. That is of course exactly what governments do for banks. Financial services of banks are propped up by regulatory capture. Their services are written into the law books and made compulsory by 'fiat'; literally by government decree. That is precisely how we have come to be in this unsustainable mess.

I don't mean to be facetious, but I would have thought I understood economics 'broadly' before my foray into to the bitcion world. Yet I couldn't understand why Mr Ron Paul kept calling inflation ''effectively a hidden tax' and such things. I understood the law of effort and reward and a little economic game theory, but I simply didn't know how the existing money system worked. I didn't understand the role of the federal reserve in finance, nor how our money comes into existence in the first place. Most people only have some vague assumptions about this. It's simply a lack of background facts that we all seem to be deluded by, not the lack of common sense, wisdom or intelligence.

I don't mean to be facetious, but Ron Paul is a fucking lunatic on all but foreign policy issues. I've spent a fuckton of years arguing with anarcho-capitalist libertarians on the internet, and I have a reasonably good grasp on the sheer insanity lassez faire would be.

I don't know much about American politics, as I am an Aussie. But I do know that Ron Paul pointed out that inflation is basically an underhanded tax on the use of money. I don't know what arguments you've had elsewhere, so I cant weigh in on who I think was right or wrong. Your statement about lassez faire economics, is simply an assertion. Did you argue in that manner with all of the other discussions?

But anyway, even when we are still using more resources, that can be overcome to a degree by recycling. It's going to depend on how good recycling can get. The main bottleneck to recycling everything (if the technology existed) is energy. But energy is effectively infinite (i.e. solar, and therefore wind and tidal etc). I think we can't go on growing for ever, but I think the point where we hit a wall is going to be a lot further down the line than the doom sayers predict.

You think? Srsly? I don't see how you come to this conclusion. If you want to see how I rather disagree, I urge you to watch the video posted above on the exponential function, and then watch Money As Debt if you don't understand the link between the physical world and economic growth, as I'm fairly sure you don't.

I doubt there would be anything in that video that I haven't seen 50 times before. But I'll have a watch at some point. I put it to you that it is you who doesn't understand how the monetary system works. There seems to be this naive view in libertarian circles that debt incurred from new money can't be repaid. I've seen absolutely zero to convince me that this is the case.

Again. Not being factious or condescending but if you are wrong there are serious consequences afoot. I wish everybody understood just a few simple things. If I am wrong, I would want to know how and why.

As I said below, we are fucked by climate change / ecosystem collapse long before we hit any monetary system collapse.

I don't know how you imagine this playing out, but I fear this may be something of a false dichotomy. The monetary system is already in the process of collapse, as is the environmental one. The bottom line is that too many humans are here and they need to much stuff that the environment cant sustain. As I've said elsewhere, if you watch the Money as Debt video, you will see how the money system and environment is interconnected. Basically though, money is just a store of value that can represent consumer buying power in the interim, until the consumers go out and buy said stuff. If you do things to the money supply that make it seem like there is an infinite possible supply, then the economy can grow without regard to the limits of the natural environment. Even worse, if you manipulate the money supply, so that growth is necessary and inevitable (such as in a system wherein you need to pay off debt with larger debt for instance), then the ultimate fate is that the demand for consumption MUST crash into the finite limits of the environment. The two problems are not separate. Money buys stuff. The environment is a stuff problem, while the (financial) economy is a money problem. Money and stuff are inextricably liked in human societies, because money is exchangeable for stuff. The both problems derive from the fact that while money is artificial, stuff is not. For money to be sustainable, it has to represent the value of stuff as a finite commodity. We have long exceeded our budget on the artificial/money side of the economic equation.

The environmental impact of over consuming has already well set in, but much of that is reflected in the costs of environmental compensatory measures. The government may give grants and energy tarifs, for home owners to install solar panels for example (the Australian govt. does this). So the environment problem is averted by a little, but these technological products didn't spring from nowhere. The taxpayer foots the bill and so the economy is forced to make a compromise. That's not to say I dissagree with solar power. I love solar, but when I pay my taxes, I do subsidize the solar installations of home owners (of which I am not). I see solar as a cost we must endure to pay back the environment for going too far. The environment doesn't just express its disdain for our excessive consumerism, in terms of natural disasters or ecological destruction. The increasing cost of oil is another economic outcome of environment. One of the problems of the artificial economy and artificial wealth from debt, is that we don't see the environmental problems much at all. The only impact we tend to feel is in our hip pockets and since we can keep spending more and more debt based money, we don't even notice that our economy is fucked. When it all collapses, it will be mostly in the economic form, then we will have much more personal contact with the environment.

I'm not usually into having more laws, but charging interest should be illegal. I mean shit, they just create the money out of fucking thin air. Charge interest on freshly created air money? WTF?

There has to be a price on new money. Otherwise governments would just print it non-stop.

HUH? How does banks charging citizens interest, discourage governments from printing money?

[I'm obviously talking about governments creating new money. Not banks. I've addressed banks below.] Because the government has to pay it back. It appears on the government balance sheet.

Do you realize government's only print a tiny fraction of the money in circulation, even then it's not for spending but to replace federal reserve notes that need to be destroyed?

"Printing" money, doesn't mean literally printing money. It means creating NEW money. New money is not printed. It is 1's and 0's on a computer somewhere. But it is created out of debt, and also adds inflation into the system. THAT is the price of new money. Without that price, new money would just be created infinitely.

The vast bulk of money is created by banks themselves when people take out loans. You'd save me a lot of time if you just watched the video.

All that money loaned out is accounted for. Even though I haven't watched the video, I know exactly the line of reasoning it is going to try and use (the one about banks only needed to hold 10% (or whatever it currently is) of reserves for what they hold in gross).

You don't know what line of reasoning it is going to take because you haven't watched it. Also you appear to be contradicting yourself.

I said: "The vast bulk of money is created by banks themselves when people take out loans."

Then you said: "Money is most certainly NOT created that way."

Then you said: "It is 1's and 0's on a computer somewhere." WHERE?

Then you said: "But it is created out of debt, and also adds inflation into the system." By who? Banks? WHO is the party that is creating it?

I am well aware that "Printing" money, doesn't mean literally printing money." That is pointed out in the video. Also as you state above "It means creating NEW money. New money is not printed." This is also pointed out in the video. That is precisely the problem. Inflation can not be avoided. Nor can economic growth. The banks account for all money loaned out, sure. But where does the interest come from? They don't create the interest when they loan you the money do they? Everybody is in debt to everybody else, but everybody doesn't have enough money to pay back all of the existing debt. The shortfall is the interest they charge. The only way to make up the shortfall is to increase consumption and that requires more consumers or more money to pay for thing to consume. Either way it requires more new money and as you say, that is created as debt, but that debt also has interest and that debt also can't be paid off with interest, not unless the economy grows and that leads to more consumption.

I DO wish I didn't have to type out a full explanation of the video make the same point that it makes.

It's probably far from a perfect system, but I don't know what else could work.

There's this new software and peer 2 peer network protocol called bitcoin. Ever heard of it? It makes banks (and probably governments) obsolete, by circumventing their money monopoly and allowing people to trade freely without restrictions or borders. It's international and transactions are nearly instant and can be used over the Internet. Was there anything else that we needed? OH YEAH! and there will only be 21 million bitcoin in existence, so that pretty much puts paid to the infinite inflation and runaway debt addiction. Bitcoin was the currency deliberately designed from the grass roots, preciceley to solve this very problem.

That's all great, but I can't buy most stuff with it. Simply, it's largely useless. If it reached critical mass, then yay. But till then, it's nothing.

So rather than having some foresight and seeing that if we choose to use it, it will become accepted, we can instead perpetuate our existing problems by ignoring the ACTUAL solution, because of the others who are ignoring it.
Bitcoin actually DOES solve the otherwise insoluble problems caused by our governments an banking system, which ARE eminently poised to destroy society as we know it. But yeah, 'hardly anybody else seems to be doing the one thing that can help us, and since I cant benefit much directly, so I won't bother to look past the end of my nose either.' That's not such a great way to become a part of the solution. It only helps if you want to remain a part of the problem.

BTW. There is plenty of stuff you can do with bitcoin (have you looked), but if you want a direct benefit, just try to save it and watch it grow in value.

Also as an aside, I can't help comparing the 'look what you cant spend bitcoin on' argument, with the one which bitches about how much the early adopters have made. Imagine what bitcoin was like when I got started. To me there is LOADS of stuff to by now. I have a hard time trying not to spend it. Back in 2010 the earlier adopters had far less incentive to try it as a consumer product, but it was their foresight and dedication, that has got it to go so far. I know that very few people likely make both arguments, but they both kinda cancel each other out. The early adopters deserved to benefit for giving purpose and utility to the bitcoin system.

The evidence that so few options as yet exist to spend bitcoin, only testifies to a golden opportunity that anybody can still be an early adopter. The growth potential for the market (and value) is still mind boggling. As it happens, I think we are pretty much at, or close to critical mass now. People can see that bitcoin works and that they will only benefit by keeping their reserves in bitcoin. The argument that you need to have lots to spend on bitcoin is only true if you put lots into bitcoin. If you put your whole paycheck into bitcoin, then you will have a hard time finding everything you need. But if instead, you think of it as a savings fund that you only spend from when you see something you like and really want; something that you can buy with bitcoin, then you will see it works. You put a little in from time to time and it appreciates due to good economics. Now you can actually save up for things (like surviving an economic collapse). Meanwhile the market in stuff you can buy with bitcoin grows quite rapidly, and you keep an eye on a few online stores that do accept bitcoin. Also you might mention bitcoin at your favorite bricks and mortar shops to help spread the word. Some shops will have plenty of incentive to adopt bitcoin, even if they only have a handful of customers that will pay with it. As a consumer though bitcoin works, whether you are spending it or saving it. I do a little of both.

For some ideas on where to spend bitcoin try here.