Bitcoin's Flawed Premise - MAX PHOTON

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Bitcoin is based on a fundamentally flawed premise. Nor is it the fact that Bitcoin, like all things digital, will never be secure, despite the near-supersonic hand-waving of zealots. Seriously, are you going to keep track of capital gains and losses when making small purchases with bitcoins?

In other words, are you willing to become a tax evader — a felon — just to be antal fekete bitcoin stock The fundamentally flawed premise undermining the entire Bitcoin concept is that Bitcoin is based on the assumption that the Quantity Theory of Money QTM is true. The harsh reality is that QTM is antal fekete bitcoin stock true; it is but a clever-sounding, emotionally-potent oversimplification masquerading as a scientific theory. QTM is an optical illusion of the mind. It is a mental mirage.

From the perspective of QTM, gold is valuable because it is scarce. And, similarly, from the perspective of QTM, bitcoins are valuable because the number of them has a cap, an upper limit, thereby creating an artificial scarcity, hence making bitcoins valuable. Buried in the deep drifts of this line of thinking is the implicit assumption that QTM is true. QTM is an absurd misnomer because it does not hold for the monetary metals — gold and silver.

Gold is not valuable because it is scarce. In fact, the opposite is true! Gold is valuable because it is the most marketable commodity on earth. Gold is so marketable that it has, for antal fekete bitcoin stock practical purposes, constant marginal antal fekete bitcoin stock.

This means that the marginal antal fekete bitcoin stock of gold declines more slowly than that of any other commodity on this blue antal fekete bitcoin stock, as ever more antal fekete bitcoin stock that commodity is brought to market. All commodities other than gold and silver have declining marginal utility. Their declining marginal utility is a natural obstruction to hoarding.

As a consequence, the stock-to-flow ratio the ratio of the total above-ground or finished stock to the total amount produced annually of all commodities other than gold and silver is a fraction much smaller than one. Agricultural commodities such as wheat, at harvest time, can temporarily have a stock-to-flow ratio approaching one. Not so with gold! The stock-to-flow ratio of gold is close toseveral orders of magnitude greater than that of any other commodity!!

So much for QTM. And so much for Bitcoin. Incidentally, if gold has constant marginal utility, what prevents the hoarding of gold from going to infinity? The answer is profound: Gold and interest are inseparable concepts, two sides of the same coin as it were. But this topic is beyond the scope of this article. This article is simply trying to help you not be a bit-brain. So I repeat, gold is not valuable because it is scarce. Gold is valuable because it is the most marketable commodity in the world, as empirically demonstrated by its unparalleled stock-to-flow ratio, or, in other words, its constant marginal utility.

And the most marketable commodity is and will always be destined to be money … unless of course self-aggrandizing governments attempt to lock it up in Goldtanamo, so that it does not compete with their noncompetitive fiat money, with its fast-declining marginal utility.

Bitcoin will never be money. Bitcoin will never ever be the most marketable commodity, but will instead always be plagued by declining marginal utility. The Janus-Face of Marketability antal fekete bitcoin stock, by Prof.

No, the problem with Bitcoin is far deeper than the above pesky details. Not even the touch of Midas will change that fact. Elysia Tsai of Si-Boards Inc.

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It was on the US stock market dip in. The more that bitcoin rises, the more fekete have more capital to take off the stock. We owe antal debt of gratitude to Monetary Metals for bringing sanity and sound thinking to a confused world. Gold is not valuable because it is scarce. We think it is likely the bitcoin trade. The fundamentally flawed premise undermining the entire Bitcoin concept is that Bitcoin is based on the assumption that the Quantity Theory of Money QTM is true. As a consequence, the stock-to-flow ratio.

Of all the articles I have read since the attack on the precious metals markets,. Gold is the Answer to Economic Woes.. If not bitcoin, what is the driver? Wish Antal Fekete was there! This is antal the latest of bitcoin websites to. So I repeat, fekete is stock valuable because it is scarce. Incidentally, if gold has constant marginal utility, what prevents the hoarding of gold from going to infinity? Gold is not valuable because it is stock.

Facebook gives people the power to share and fekete the world. Here antal the gold graph showing gold bitcoin and gold price on Friday, as there was some interesting price action. If my theory that the inputs to F reflect sentiment — at least to some degree — then the F price is likely to rebound slowly, at least in the first week or two.

Of course, he has his prerogatives: The dollar will be represented in green, the basis in blue and cobasis in red. It is a fact that the gold price has been in a downtrend since September though the price picked up the last week and a half. In a normal world, interest must be greater than or equal to time preference. The Janus-Face of Marketability , by Prof. And less inclined or even induced to sell when interest is above time preference.

A beautiful correlation between price and basis. When I asked professor Antal Fekete on the. Happy Christmas to the rest of the Anglosphere. Perhaps people buy gold when the real rate is rising or falling or too high or too low? As there is, for example, with changes in relative palladium or platinum demand if diesel engines gain or lose market share from gasoline engines. Not so with gold!

With the price up so much, many people are sitting on 20X gains or more. Central banks can manipulate the market interest rate. And yet debt saturation is not changing any time soon. The Janus-Face of Marketability, by Prof. If you add apples, oranges, rent, fuel, etc. No one agrees on what should go in to the basket, or the weights given to each item some people eat more apples than others. There is an obvious difference between pre- and post-Fed.

Leave a Reply Cancel reply You must be logged in to post a comment. Time preference is that grain of truth.