Word vs bitcoin
Reading the latest posts about Bitcoin really disappointed me. Arguments about the complete insecurity of green wrappers (dollars) and about the immateriality of gold show that the habrovans lack knowledge of the theory of money to understand all this.
Therefore, today we will analyze Bitcoin from the point of view of the Quantitative Theory of Money, which is currently basic in economics. There is a criticism of this theory, but for the beginning it will be enough.
I am here a little distorting the traditional notation and simplifying, I think I do not sin against the truth. According to this theory, the value of money depends on only three parameters. And even there is a formula:
Cost of money = Y / (V * M)
')
M is the amount of money (coins) in circulation. This is the easiest.
V is the rate of turnover of money, that is, how many times the average "coin" participated in transactions for a certain period of time. I will give an example:
The goose and the pig went to the fair. Goose baked pies, pig - pancakes. B decided to sell them for a ruble. They came early, no one else, they stand and are bored. Well, the pig is a piggy bank - I found the ruble and bought a pie. Gus thought and on the same ruble bought a pancake. ... As a result, with one coin in the system, the goose managed to buy 20 pancakes, and the pig 20 pies.
In this case, the coin turned around 40 times and V = 40. But it is necessary to take into account the average of all coins in circulation.
Y is the amount by which transactions were made for the same period of time. It should be borne in mind that not all transactions are equally good and not everything is considered correctly. If some unknown Vasya and Petya constantly change Bitcoin to some other Geekcoin and back, then they can chop up deals for millions. But who cares? Money is needed to change it for something useful! Only such transactions are counted in V and Y.
The traditional (and very sensible!) Approach is to consider only transactions that go to Gross Domestic Product (GDP). And there are deals only with goods intended for direct use. Transactions with other currencies, raw materials and semi-finished products, antrikvariyat (that which only changes the owner, but is not made), etc. are not taken into account.
The cost of money is generally the reciprocal of the average price level. The bottom line is that if commodity prices rise, then money becomes cheaper.
Depending on how these three parameters change, the value of a currency can rise, fall and even go to zero. So let's see:
The number of Bitcoin is constantly growing, albeit slowly. This will lead to impairment, unless of course the number of transactions with this currency is growing.
The speed of circulation in a traditional economy is stable, it depends on how much money is in wallets to save, how often people are paid out in the country (once a month or once a week), the speed of transactions in banks, etc. With electronic money, I would not be so sure of stability. Changes in the rules of the transaction can even affect the speed of circulation. But so far no changes are foreseen and this is all a pure hypothesis.
But with the deals in Bitcoin the biggest problem. It is clear that when there was a boom in the media, people bought bitcoins and their value grew. But if this is all the main transactions with Bitcoin, then we agreed not to take them into account and the real long-term cost of Bitcoin is zero! Then it is no different from the MMM type pyramid. While there is an influx of depositors, everything is fine, and then - Oh!
Is there anything else behind Bitcoin? I read allegations that the currency used for all criminal transactions due to anonymity. These transactions are taken into account. Drugs, weapons are real goods. But how many such deals? What will happen to their number if the law enforcement agencies are engaged in this payment system? What other transactions are carried out with Bitcoin?
And the moral is simple. Money can be provided only by sellers who are willing to sell real goods for them. And you need to discuss the possible benefits for sellers with Bitcoin turnover. And here convenience and reliability are important. So far, looking at the course jumps from 1 to 30 dollars and back, I do not see much reliability. A limited number of coins and the inability to print them when they like - this is just the problem of Bitcoin. Demand fluctuates, but supply cannot adapt. This is fundamentally laid instability course. The speculators are good, the business is bad. The result is pitiable.
The dollar is cool because of the large base of transactions with it. Of course, Obama can print dollars (although formally this is not quite the case), but the US GDP is about 14 trillion USD plus transactions outside the US. The base is so great that no real issue will provide such price fluctuations as Bitcoin has.
PS I do not think that with this passage I convinced everyone who was sure of the insecurity of the dollar. Therefore, I assume a simple experiment.
I'm looking for a freelancer with programming experience for Android. But before we talk about the project, I propose to immediately decide in what currency Bitcoin or US dollars will be calculated. Answer in the comments which currency would you choose? Only seriously, really.
And according to the statistics of the answers, everyone will be able to compare the security of the dollar and Bitcoin.
Therefore, today we will analyze Bitcoin from the point of view of the Quantitative Theory of Money, which is currently basic in economics. There is a criticism of this theory, but for the beginning it will be enough.
I am here a little distorting the traditional notation and simplifying, I think I do not sin against the truth. According to this theory, the value of money depends on only three parameters. And even there is a formula:
Cost of money = Y / (V * M)
')
M is the amount of money (coins) in circulation. This is the easiest.
V is the rate of turnover of money, that is, how many times the average "coin" participated in transactions for a certain period of time. I will give an example:
The goose and the pig went to the fair. Goose baked pies, pig - pancakes. B decided to sell them for a ruble. They came early, no one else, they stand and are bored. Well, the pig is a piggy bank - I found the ruble and bought a pie. Gus thought and on the same ruble bought a pancake. ... As a result, with one coin in the system, the goose managed to buy 20 pancakes, and the pig 20 pies.
In this case, the coin turned around 40 times and V = 40. But it is necessary to take into account the average of all coins in circulation.
Y is the amount by which transactions were made for the same period of time. It should be borne in mind that not all transactions are equally good and not everything is considered correctly. If some unknown Vasya and Petya constantly change Bitcoin to some other Geekcoin and back, then they can chop up deals for millions. But who cares? Money is needed to change it for something useful! Only such transactions are counted in V and Y.
The traditional (and very sensible!) Approach is to consider only transactions that go to Gross Domestic Product (GDP). And there are deals only with goods intended for direct use. Transactions with other currencies, raw materials and semi-finished products, antrikvariyat (that which only changes the owner, but is not made), etc. are not taken into account.
The cost of money is generally the reciprocal of the average price level. The bottom line is that if commodity prices rise, then money becomes cheaper.
What does all this mean for Bitcoin?
Depending on how these three parameters change, the value of a currency can rise, fall and even go to zero. So let's see:
The number of Bitcoin is constantly growing, albeit slowly. This will lead to impairment, unless of course the number of transactions with this currency is growing.
The speed of circulation in a traditional economy is stable, it depends on how much money is in wallets to save, how often people are paid out in the country (once a month or once a week), the speed of transactions in banks, etc. With electronic money, I would not be so sure of stability. Changes in the rules of the transaction can even affect the speed of circulation. But so far no changes are foreseen and this is all a pure hypothesis.
But with the deals in Bitcoin the biggest problem. It is clear that when there was a boom in the media, people bought bitcoins and their value grew. But if this is all the main transactions with Bitcoin, then we agreed not to take them into account and the real long-term cost of Bitcoin is zero! Then it is no different from the MMM type pyramid. While there is an influx of depositors, everything is fine, and then - Oh!
Is there anything else behind Bitcoin? I read allegations that the currency used for all criminal transactions due to anonymity. These transactions are taken into account. Drugs, weapons are real goods. But how many such deals? What will happen to their number if the law enforcement agencies are engaged in this payment system? What other transactions are carried out with Bitcoin?
And the moral is simple. Money can be provided only by sellers who are willing to sell real goods for them. And you need to discuss the possible benefits for sellers with Bitcoin turnover. And here convenience and reliability are important. So far, looking at the course jumps from 1 to 30 dollars and back, I do not see much reliability. A limited number of coins and the inability to print them when they like - this is just the problem of Bitcoin. Demand fluctuates, but supply cannot adapt. This is fundamentally laid instability course. The speculators are good, the business is bad. The result is pitiable.
The dollar is cool because of the large base of transactions with it. Of course, Obama can print dollars (although formally this is not quite the case), but the US GDP is about 14 trillion USD plus transactions outside the US. The base is so great that no real issue will provide such price fluctuations as Bitcoin has.
PS I do not think that with this passage I convinced everyone who was sure of the insecurity of the dollar. Therefore, I assume a simple experiment.
I'm looking for a freelancer with programming experience for Android. But before we talk about the project, I propose to immediately decide in what currency Bitcoin or US dollars will be calculated. Answer in the comments which currency would you choose? Only seriously, really.
And according to the statistics of the answers, everyone will be able to compare the security of the dollar and Bitcoin.
Source: https://habr.com/ru/post/131243/
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