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Kasz216 on 18 April 2013
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richardhutnik said:
Kasz216 said:
Mr Khan said:
Kasz216 said:
Mr Khan said:
It does make the whole concept of the gold standard seem rather silly, given that its only advantage over fiat currency is that a country has to tweak its balance of trade in order to mess with its currency values, rather than just ordering money printed or buying up a hell of a lot of assets to alter supply. But the underlying idea is still about arbitrarily assigning value to something.

Granted, gold is also a very useful metal, similar to Platinum or the Rare Earths.


Seems like an important advantage though if you've been following Bitcoins.  Which have skyrocketed in value when literally that's it's only advantage vs real currencies... and it has tons of disadvantages.

The key about gold though is that while the era of the gold standard is idealized in terms of how countries conducted their monetary policy (the phrase back then was "Rules of the game" that countries had to follow), stronger countries, like Great Britain for instance, were always breaking the rules, forcing themselves into stronger positions and other countries into weaker positions, so it's not like the system is foolproof for abuse.

And i really hadn't followed bitcoins, aside from SamuelRSmith mentioning them in passing in his "Pillars of the State" thread. What went on there?

Basically they shot up in "value" by a gigantic amount in recent weeks.  Which is interesting because Bitcoins as a currency have less backing then coupons printed up by a Hobo. (God bless the King of America)

 

As far as anyone can tell they shot up in value because

A) People are willing to buy them/accept them for stuff.

B) They get made in a specific not expected to change way.

 

So... people are rushing to a "fake" currency more or less simply because they don't expect it to inflate.

Will see if bitcoin faces inflation or not.  If it actually does, then either the infrastructure that runs bitcoin is broken, or that the arguments for what causes inflation are wrong, particularly among those who argue for gold standard.

Really depends how you want to classify inflation.  It's value does have to crash eventually... and as far as i know, the more interested people are in bitcoins the more will be made even if it is formulatic... (I think.... not really sure how bitcoin mining works.)

Though i think you have it backwords.

 

The people who argue for the Gold standard absolutely HATE Bitcoins and other digital currencies because of the lack of backing and in general expectation of inflation always bringing down the value of the currency.  (Since more bitcoins are created afterall.)

 

It's like if you had an RPG economy in the real world... all the prices for magic potions and swords would increase, because everytime you kill something a goblin creates more gold.

 

Online RPGs more or less try and mitigate this via shopkeepers being a good way to "Destroy" currency... however the durable goods they provide in exchange still keep defacto currency in the system... eventually causing shop items to become really cheap to sell second hand.

It's the same with loot items.  If your in a game with rare loot, the best thing to do is to day 1 grind out all you can to get the best loot... then IMMEDIATLY sell it for money if you can... or more "durable" items if you can't.

 

The only items that keep there value... and actually become more expensive as the game goes on are limited promo items which will never come again. (Specifically ones that are particularly rare.)

 

Well that or money only items.   In TF2 for example... Metal was originally used as a currency but due to inflation was rejected ultimatly for keys.  Which had to be bought with real cash.

The only items worth a bunch of money are rare promo items like bills hats and Earbuds (worth more now then they have ever been in keys)...  and unusuals which technicaly should lose value via inflation since there are ever more added... but they're really rare.