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If Bitcoin becomes a globally accepted store of value, would it be liable to the same problems that mired the gold standard?

It would not just be plagued by the same problems it would create some new ones. Following the Weber (2016) who actually written research exploring exactly the question that you are asking here: The ...
1muflon1's user avatar
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9 votes

If Bitcoin becomes a globally accepted store of value, would it be liable to the same problems that mired the gold standard?

If someday this "bitcoin standard" does come to fruition, would it be susceptible to the problems that plagued the gold standard? A bitcoin standard implies that all major countries have ...
Brian Romanchuk's user avatar
7 votes

If Bitcoin becomes a globally accepted store of value, would it be liable to the same problems that mired the gold standard?

The only real advantage of "bitcoin standard" over gold standard is that bitcoin standard wouldn't drive gold prices up, thus depriving of it industries which need gold as a raw material. ...
Dmitry Grigoryev's user avatar
6 votes

How can all the bitcoin in the world be worth more than McDonald's Corporation?

Bitcoin has two different audiences right now. One group wants to use it to transfer money in a hard to trace manner and is willing to take some risk and some frictional costs to do it. Some of these ...
zeta-band's user avatar
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6 votes
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How can all the bitcoin in the world be worth more than McDonald's Corporation?

Bitcoin doesn't have a value. It doesn't create wealth - it destroys it. It therefore has no yield. It does, however, have a price. It's designed to have tightly-constrained supply, so that those ...
410 gone's user avatar
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5 votes
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because bitcoins do not generate earnings, then (it is a ponzi scheme)?

What is the reasoning behind the notion that because bitcoin has no intrinsic value therefore it's not suitable as currency? Or, to put another way, if no one "held" US dollars, but simply used ...
JimmyJames's user avatar
4 votes
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How digital currency (like Bitcoin) proponents solve the problem of its high volatility to make it a good candidate to replace fiat?

tl;dr: fiat money can be fully digital money as noted in the +1 comment of Jasper so it does not make much sense to talk about replacing fiat money with digital money as fiat money can be fully ...
1muflon1's user avatar
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4 votes

Theoretical market capitalisation of a crypto currency?

As there is no practical limit on the number of cryptocurrencies that can be created, and as no one crpytocurrency has a unique advantage over any other, and as no cryptocurrencies are legal tender ...
410 gone's user avatar
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4 votes
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What are the most common methods of determining valuation used by economists that claim Bit-Coin is on the verge of being a bubble

I'll draw from John Cochrane's article and working paper, which provide some great points. Bitcoin doesn't provide dividends or an interest rate, there isn't any payment or reward for saving in ...
one_teach_wonder's user avatar
4 votes

What are the most common methods of determining valuation used by economists that claim Bit-Coin is on the verge of being a bubble

There are two ways to look at the value of a financial instrument. One is the underlying asset base, the other is the yield. Bitcoin has no underlying asset base and no yield. Therefore, its only ...
410 gone's user avatar
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4 votes
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What does the value of bitcoins depend on?

The price is unstable because there's a fairly small free float (the quantity available for buying and selling with true currencies) compared to the level of transactions. It's a Ponzi scheme, so ...
410 gone's user avatar
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4 votes
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The independence of Central Banks

The independence of the central bank means that the bank is independent of the government. A mandate of the central bank is to ensure price stability. However any excess cash the bank prints is the ...
Giskard's user avatar
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4 votes

What does the price of bitcoin per ounce of gold tell us?

It's BTC per Oz gold which shows how many btc you need to pay for 1oz. To compute this, you need to know the price (and both are quoted in USD). It still tells you a lot about the purchasing power. A ...
Alex's user avatar
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3 votes

What does the price of bitcoin per ounce of gold tell us?

I am not sure what the chart intends to show. In any case, the series in question is how many BTC you need to pay for one ounce of gold. The scale is logarithmic by the way. If you overlay the inverse ...
AKdemy's user avatar
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3 votes

Why does the entire cryptocurrency market go down when BTC goes down?

Bitcoin is the market leader for crypto-style assets - it is older, more established, its brand is more entrenched. For example: I can expect others to know about Bitcoin off the top of their head, or ...
RegressForward's user avatar
3 votes
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CO2 footprint per bitcoin transaction

I did some napkin math based on your data. At 4 tx/s and 8GW, that is 2GWs per transaction. 0.5kg/kWh is around 139kg/GWs. Thus each transaction is around 278kg. Looks like we reached the same answer. ...
Kent Shikama's user avatar
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3 votes
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Why do graphic card prices rise due to bitcoin miners?

I thought someone would have answered this by now. Folks will argue but bitcoin is still a relatively new currency. A couple of regulations here, some stolen money there, and a lot of people may ...
Jay's user avatar
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3 votes
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Why is deflation not considered the opposite of inflation?

People think that inflation is bad when it gets out of control, say when its more than 3 or 4% a year. The idea is that we all make economic decisions based on prices and its harder to make those ...
Fix.B.'s user avatar
  • 2,668
2 votes

because bitcoins do not generate earnings, then (it is a ponzi scheme)?

In general, it is possible to find assets that earn a positive yield. There are still positive-yield low-risk bonds and savings accounts out there, for most currencies. Therefore, rational people ...
410 gone's user avatar
  • 8,168
2 votes
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How can 1 BTC gain value in USD if inflation is happening?

I'll try to fit this in an answer. I think you are confusing nominal and relative value. Inflation means that the 'value' of your money depreciates relative to other things. For example, in the year ...
tibo's user avatar
  • 328
2 votes

Can the function of the Central bank become automated?

It is conceivable that one of the functions of a Central Bank, of being a regulator of money supply, could ultimately be automated, if artificial intelligence were to advance enough. However, that ...
410 gone's user avatar
  • 8,168
2 votes
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Theoretical market capitalisation of a crypto currency?

Unfortunately, those who are riding the current trend do not have a clue about what they are doing. I guess, they don't even think of hypothetical situations you've given above to legitimise ...
london's user avatar
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2 votes
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Did Bitcoin increase the money supply of the world?

The concept of “money supply of the world” is vague. I think there’s at least two ways of looking at it. Economics is normally concerned with the formal definition of “money”. Money is associated ...
Brian Romanchuk's user avatar
2 votes

How interest payment work in lending under bitcoin standard?

Correction of Some Misconceptions You say: Whenever the debt is fully paid the monetary supply increases This is incorrect. Bank lending expands money supply and loan repayment contracts money ...
1muflon1's user avatar
  • 57k
1 vote

Is it possible for a coin / token to act as long-term store of value and money at the same time?

Is it possible for a coin / token to act as long-term store of value and money at the same time? Yes. By definition money has to have the following three properties (see Mankiw's Macroeconomics pp 82)...
1muflon1's user avatar
  • 57k
1 vote

How can anyone possibly predict how the price of anything (stocks, Bitcoin, fiat, etc.) will change without "insider knowledge"?

How can anyone possibly predict how the price of anything (stocks, Bitcoin, fiat, etc.) will change without “insider knowledge”? You can do that by forecasting based on data. Exact forecasting model ...
1muflon1's user avatar
  • 57k
1 vote

If Bitcoin becomes a globally accepted store of value, would it be liable to the same problems that mired the gold standard?

Gold standard did not have any real problems, so Bitcoin would not have any real problems. Issue/problem with Bitcoin is not that it is bad, issue/problem is that it is good. Governments like power, ...
NoSenseEtAl's user avatar
1 vote

Can the function of the Central bank become automated?

There is an existing body of economic thought that looks at this issue - the analysis of rules-based policy. One earlier suggestion was the monetary growth rules of the Monetarists. Currently, “Taylor ...
Brian Romanchuk's user avatar
1 vote

How does a perpetual futures contract affects the price of the underlying?

(More of a long comment.) The "futures" in "perpetual futures" found on cryptocurrency exchanges is a bit of a misnomer, as already pointed out. It's not a futures position, but a leveraged spot ...
Michael's user avatar
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1 vote
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How should I interpret (BTC/CNY) / (BTC/USD)?

I confirmed my understanding by directly comparing to btccny and btcusd. I think gaps between the green and purple lines represent arbitrage opportunities. When the purple line is above the green ...
Gerbus's user avatar
  • 119

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