The impact of Bitcoin "Halving"

[tecate]

So I have read Mr Boyapati's promo of bitcoin.

Again with the bias with your 'promo' jibe. As outlined to you previously, you don't like the conclusion that he arrived at - so you kick up with this prejudicial nonsense.

I don't think I could have put it better myself. "each market participant values the good based on their appraisal of whether and how much other participants will value it" exactly as Mr Fax Machine and the vast majority of mainstream economists have argued. It is pure speculation as to what the other speculators will speculate - a game.

So let me get this straight. You are surprised when market participants determine the value of something? What of it?

As soon as the satoshi drops that it is a BOHA it goes to zero, a risk that even the enthusiasts admit exists.

Ok, so we're 11 years in - how long more will this realisation take and people reach your higher level of thinking? Will the Euro have managed to weather its next crisis by then? I can more than accept bitcoin going to zero as a possibility (albeit a very unlikely one). To exactly the same point, do you accept that the Euro could come to an end over the next couple of years (just like it almost did in the aftermath of the last financial crisis)? Do let us all know your thoughts on that.

"Bitcoins are not backed by any physical commodity, nor are they guaranteed by any government or company, which raises the obvious question for a new bitcoin investor: why do they have any value at all? " Indeed. And it is the question that I ask. But the question doesn't even appear on the exam paper!

What are you talking about? You're saying it's not considered yet you're quoting from the guys own analysis. Pure brilliance.

In fact there are two key questions here, intrinsic value and government backing. Bitcoin would of course have scored an F on both and maybe for bitcoin enthusiasts those would be good scores on these questions.
Having looked at the exam paper again I think I would probably agree with the allotted scores but as I have repeatedly said I agree with the mainstream view that since it is tethered to nothing that is a fatal flaw.

Firstly, the graphic deals with the properties of a store of value as opposed to a means of exchange/transactional currency. There is a distinction. And before you claim otherwise, he still discusses all three functions of money (Means of Exchange, Unit of Account and Store of Value) in the complete analysis - and all facets implicated by those functions.

His analysis is tainted it seems (because he had the misfortune to arrive at a conclusion that you are diametrically opposed to). outlining their six characteristics of money (as opposed to a store of value) as Divisibility, Portability, Acceptability, Durability, Scarcity and Stability. Where's the mention of intrinsic value and government backing?
And other than that, are you a hypocrite much - or only on this subject? You're walking around with FIAT money in your pocket that has NO intrinsic value. On government backing, what comfort is that to the holders of every FIAT currency that has ever failed? (and they all fail eventually - given that the average lifespan of a FIAT currency is 27 years). We've had 2 of them fail in the last 10 days alone!
Should the euro be dissolved within the next couple of years (which is a real possibility) and your euros are converted into Punt Nua's, the value of your wealth is going to take a major haircut. What does your government backing stand for in this situation? I'll tell you - nothing! There was considerable discussion here on AAM ten years ago on that very subject. People were scrambling to open bank accounts in Germany/Holland/Belgium. No-one mentioned anything about government backing.

And by the way, we had this yesterday =>

Scarcity is not a reason for buying BTC

Even the Federal Reserve agrees that scarcity is a fundamental characteristic of store of value and money.

The Boss' poetry is scarce. That is not trying to be smart alicky but it is my riposte to your Mr Fax Machine riff.

And this betrays a total lack of understanding. I invited him to examine his proposed money or store of value against the other essential characteristics. Scarcity is fundamental - but not without holding its head above water with regard to the other essential characteristics of money/store of value.
And the point I made about Krugman and his fax machine is equally valid for yourself and Brendan. There's no doubt that he's a scholar of one particular school of economics (Keynesian). I'm sure that serves him well in the Keynesian economics gravy-train. However, the fax machine incident betrays a total lack of understanding of technological impact. That's significant in this discussion - not just because you decided to underpin your argument with his opinion. It's significant because blockchain/crypto/bitcoin is new found innovation which is in the foundational stages of disrupting all manner of aspects of finance. Everything doesn't just stay the same. FIAT may have served us reasonably well but that doesn't mean that it isn't fundamentally flawed and that we shouldn't look to improve and consider alternatives (or provide those that manage FIAT with motivation not to screw up!).
Many people have a difficult time appreciating the value of a digital currency given that you can't see it, you can't touch it. The irony is that you can do those things with a euro note but all it is - is a bacteria-riddled promissory note made of cotton. Bitcoin may not be backed by a physical good but its integrity is locked in by its code as it's programmable, decentralised money. It can't be tampered with - whereas you can print off FIAT money to your hearts content.
Digital money is only one of the technological changes we're seeing. There are other facets of technology that are already in the process of having a fundamental effect on the FIAT monetary system. Given his fax machine howler, I certainly wouldn't trust Krugman in his consideration of how new forms of technology and innovation impinge on finance and monetary systems.

I think there's a risk that the pandemic is accelerating the move away from cash to contactless payments and centralised digital currencies like China are rolling out. Such moves may make it more difficult to cash out of cryptos, as you still can't really use them to buy stuff, any significant increase in restrictions on cashing out could lead to a collapse.

China is a totalitarian regime. So they're much more likely to go with a full court press against bitcoin than other governments. But no matter - there are all sorts of twists and turns in the road over the next few years where crypto and regulation is concerned. I still liken it to the war on drugs. A government can go in with both feet and they will surpress it in the short term. However, whatever chance they have at controlling it out in the open, in the longer game, they won't ever be able to stop it. More so than the actions of governments, I think its far more important that innovators in the space manage to find a way to make it easier to use - that's a bigger issue (if it's to be used on a mass market basis).

tecate you are wont to roll out Lebanon, Venezuela, Zimbabwe etc. in your demonisation of FIAT.

I've recognised that FIAT has (and continues) to serve society - but I've also recognised its flaws (or rather the flaws of the people implicated in managing it). On the flip side, you can't manage to be objective about it (and the same re. bitcoin).

tecate you are wont to roll out Lebanon, Venezuela, Zimbabwe etc. in your demonisation of FIAT. Let me pose a similar question. Do you think an official police force is good for society? Of course, you may say no - there are those in the bitcoin community who appear to be of an anarchist persuasion. In which case ignore the rest of this post.
So if you have reached thus far I take it that you do think an official police force is a good, nay necessary, thing in a modern society. But it is very clearly open to abuse. Indeed one can cite many instances where it has been grossly abused; interestingly the Venn intersection of these instances with your own FIAT rogues' gallery is far from the empty set.
By analogy I put it to you that a well functioning FIAT currency can be very beneficial, nay necessary, for society and the fact that it is open to abuse and has indeed been abused should not mean that we should abandon it.

The political stuff I'm not getting in to as for the purposes of this discussion, it's pointless (and in your case, it's clouding your ability to be objective when it comes to consideration of bitcoin). However, to your point on a 'well functioning FIAT currency', see my comments on FiAT above. FIAT isn't the issue in principal. People are always the variable. The expectation is that we should trust someone when it comes to FIAT money. Sooner or later, that will fall apart. It's for precisely that reason that the average lifespan of a FIAT currency is 27 years. It's for that reason we have inflationary systems as a stealth tax against ordinary people (as they don't understand it and its implications). It's for that reason we have QE that has proven to be totally inequitable - favouring the pigs with their snouts closer to the trough.

On the flipside, Satoshi recognised this problem and in designing bitcoin, he/she assumed the principal of trustlessness from the outset. Don't trust - verify. Decentralised programmable money can't be screwed with in the way that FIAT money is being tampered with. Government backing is the last thing it needs in achieving that.

 

[Duke of Marmalade]

Replied twice

 

[tecate]

BTW I love your chart. Hands up I've no clue what it means. But I do know what real money is. What is funible? And is Fiat cars or something else? I suppose now that's probably a very stupid question.

I trust you're happy with your contributions here. It seems to have been really worthwhile...we all learnt so much.

 

[Leo]

However, whatever chance they have at controlling it out in the open, in the longer game, they won't ever be able to stop it.

True, but if they stop real money going in or out, then it doesn't matter what share of whatever crypto you have, it's all worthless. To the Duke's point on societal benefit, if cryptos ever take off to a point where they threaten government management of their finances, their ability to fund social welfare, etc., the clamp down will be quick and hard.

 

[Brendan Burgess]

"fungible" is a very important concept.

The euro in your pocket is the same as the euro in mine.

Or as Wictionary defines it : Able to be substituted for something of equal value or utility; interchangeable, exchangeable, replaceable.

I have no idea why Bitcoin is less or more fungible.

Could it have something to do with the fact that newly mined BTCs are, in some way, different from the original ones?

Brendan

 

[tecate]

True, but if they stop real money going in or out, then it doesn't matter what share of whatever crypto you have, it's all worthless.

There's no doubt that consideration of this is important, Leo. I'm fully attentive to this. There's a couple of things here though. China is one single jurisdiction. Bitcoin doesn't respect borders. Perhaps if all governments came together (and it would have to be all), then they can snuff it out. I don't see that being possible.
There's no doubt but that the virus has prioritised central bank digital currencies (CBDCs). At the start of the Covid shítshow, Pilosi tried to get an emergency bill through the house that also included provision for a digital dollar. One thing that they've found lacking is the ability to get funds out to citizens fast in the midst of a crisis/pandemic. Other than that, nobody wants to touch those bacteria/virus infested notes anymore. The Chinese have upped their schedule for the development of their own CBDC. However, these are still not likely to be used at a retail level any day soon.

If you mean that they already have electronic centralised payment systems like Wechat, etc. - sure. But as this develops, who's to say that people will take their money out of the crypto system or even want to? Bitcoin's volatility may be an issue that's only going to stabilise over many years (as it's market capitalisation continues to expand and it goes through the iterative process of price discovery). However, alongside Bitcoin, stablecoins are another tool that can be used. Over the past couple of months, stablecoins have grown in market capitalisation by a few billion.

To the Duke's point on societal benefit, if cryptos ever take off to a point where they threaten government management of their finances, their ability to fund social welfare, etc., the clamp down will be quick and hard.

That eventuality is many years away should it ever happen. And it may never happen. It may be that cryptos serve a complementary role alongside FIAT currency (and as a motivator for CBs and governments not to screw up). However, if we ever get to that scenario you mention, then there are other ways that taxes can be structured. We have IoT coming down the tracks also. The technology is there to move to pay per use taxation systems. But...that's a long term consideration.

This is significant - more-so in terms of those who speculate on crypto and in the developmental timetable for crypto. They will never kill it completely - but they could hold it up. That's why - to my mind, making bitcoin/crypto far more usable for ordinary people is the bigger issue.

 

[tecate]

The euro in your pocket is the same as the euro in mine.

For the most part although there are some exceptions. You might have difficulty at times in using a €500 euro note. A government might withdraw a particular note from circulation (eg. India last year and their sudden withdrawal of 500 and 1000 rupee notes) - which kind of made it hard to exchange! Try using a NI or Scottish £10 note in England or in a Bureau de Change overseas.

I have no idea why Bitcoin is less or more fungible. Could it have something to do with the fact that newly mined BTCs are, in some way, different from the original ones?

With cash, there's no knowledge of where it's been. It could have been used to finance a drug deal or some other illicit practice. With bitcoin, there is pseudo-anonymity but the blockchain itself is totally transparent. The irony here is that people tar and feather bitcoin as being the tool of criminals when in actual fact, law enforcement agencies love it - as unlike cash, it's traceable.

For me personally, I don't give a fiddlers where my cash or bitcoin has been before it arrived in my possession. However, for the regulatory world, it's not something they like. For this reason, institutions pay a premium for virgin/newly minted bitcoin.
This needs to be addressed in bitcoin from a privacy standpoint anyway - regardless of perception surrounding fungibility. To that end, there are proposed code improvements waiting in the wings to deal with this. However, bitcoin development improvement processes move at a snails pace and are done by consensus. That will be resolved but there will be a wait.

 

[Leo]

Perhaps if all governments came together (and it would have to be all), then they can snuff it out. I don't see that being possible.

It is all hypothetical and I don't see it happening any time soon, and if it was to require all governments to take action, I think we'll agree the likelihood of that ever happening is slim to none. However, it's not as far-fetched to imagine the US getting spooked about loss of control, or China's growing influence enough to see them ban their institutions from allowing money to flow into or out of crypto. If that were to happen, it's going to be very difficult for anyone living there to get into or out of crypto.

 

[tecate]

However, it's not as far-fetched to imagine the US getting spooked about loss of control,

I couldn't agree with you more. Look how spooked they got at the Libra hearings last year. And yet, people think Libra is dead but it's gone back to the drawing board, revised and will come back again.
In the case of a decentralised crypto, it's not as straightforward. The decision to take a full court press strategy is not one they will take lightly. They may go from some control to zero control as it could backfire completely.

China's growing influence enough to see them ban their institutions from allowing money to flow into or out of crypto. If that were to happen, it's going to be very difficult for anyone living there to get into or out of crypto.

They already have a ban in place. They're changing tact as it suits them or as they try to deal with it - going back and forth. They told miners to get out...now they're not. They've banned exchanges effectively - although there are a couple of exchanges they seem to be turning a blind eye to.

As regards getting into or out of crypto, to my previous point, perhaps they won't want to get in and out of it - and can work on two tiers...the first one with their government approved money and the second track being with the money people keep in the crypto ecosystem. Like I said, it doesn't just consist of bitcoin - there are stablecoins in existence also. This article seems to support that development already.
Here's another thing to consider....if we accept that ultimately (and this may take quite some time yet at retail level), we're going to have digital CBDCs...isn't it going to be harder to prevent exchange from one digital form into another?
To your general point, nobody knows for sure how this game will pan out - we'll find out over the next few years but from what I can see in the short term, bitcoin won't face that adversity - and in the meantime, the ecosystem continues to be built out and its network effect continues to develop.

 

[Leo]

As regards getting into or out of crypto, to my previous point, perhaps they won't want to get in and out of it - and can work on two tiers...the first one with their government approved money and the second track being with the money people keep in the crypto ecosystem.

But if they face restrictions on converting their government approved money to crypto how do they buy in, and if this money is locked within the crypto ecosystem with no way out, it's not money any more.

Here's another thing to consider....if we accept that ultimately (and this may take quite some time yet at retail level), we're going to have digital CBDCs...isn't it going to be harder to prevent exchange form one digital form into another?

I think it would actually be much easier, controls in a digital system are just code. You can't control who I hand a tenner to with code. With a centralised digital currency, the central authority will have complete control on what it can be used for, who it can be transferred to, etc..

 

[tecate]

But if they face restrictions on converting their government approved money to crypto how do they buy in, and if this money is locked within the crypto ecosystem with no way out, it's not money any more.

Well, how are they doing that right now with a ban in place? And perhaps it's not a case of buying in. Perhaps it's a case of the exchange of goods and services for proper (decentralised) digital currency. You have a concern about money being locked within decentralised crypto. As every day passes, that becomes less of a concern for me. As I said, there isn't just Bitcoin. There's a range of cryptocurrencies and in particular, stablecoins.

So I guess my point is that - sure, it's a totalitarian regime and they can push it back - but it's peer to peer money - I'm not sure how they can prevent its use.

I think it would actually be much easier, controls in a digital system are just code. You can't control who I hand a tenner to with code. With a centralised digital currency, the central authority will have complete control on what it can be used for, who it can be transferred to, etc..

I'm a bit hazy as to how this pans out - in the same way as when I considered Libra when it was proposed last year, I wondered about the ability to trade it back and forth with decentralised crypto. I'm unsure how this pans out - in the Chinese context. Could decentralised exchanges be used? If it's being tracked and it gets blacklisted somehow, can mixing services be used. I have no idea. So - your point is valid - but we'll have to wait for it to come out to see for sure what the nature of chinese CBDC is like in practical terms.

We don't know how people will start to react to totalitarian-friendly CBDCs either. It could end up being the greatest on-boarding initiative for decentralised currency. Who knows.

 

[Duke of Marmalade]

So let me get this straight. You are surprised when market participants determine the value of something? What of it?

Are you deliberately missing my point? Vijay described it as "an entirely different category of goods...whose value is set game-theoretically". I'm a simple sort of fella but I interpret that is meaning that the bitcoin price is determined in a sort of game between the participants where they try to second guess each other.

Ok, so we're 11 years in - how long more will this realisation take and people reach your higher level of thinking?

The lowest form of wit.

What are you talking about? You're saying it's not considered yet you're quoting from the guys own analysis. Pure brilliance.

And getting lower.
I thought you were following the metaphor. The "exam" is the list of questions you posted under the title "The Attributes of a Good Store of Value". And you didn't see fit to include intrinsic value or government management? To be fair to Vijay he did not have that title on his graphic and it was fair enough in context.

Firstly, the graphic deals with the properties of a store of value as opposed to a means of exchange/transactional currency.

Intrinsic value and government management are very relevant to "store of value" IMHO.

And other than that, are you a hypocrite much - or only on this subject? You're walking around with FIAT money in your pocket that has NO intrinsic value.

I explained how it was tethered to the real economy in what you described as a long winded and off topic way. I will not repeat it. I did not regard a picture of bank notes in a Lebanon street as a refutation of my assertion no more than I would regard a picture of some third world police brutality as proof of the evils of policing for my society.

 

[tecate]

Are you deliberately missing my point? Vijay described it as "an entirely different category of goods...whose value is set game-theoretically". I'm a simple sort of fella but I interpret that is meaning that the bitcoin price is determined in a sort of game between the participants where they try to second guess each other.

Game Theory is the study of mathematical models and would be entirely relevant in the design of a decentralised digital currency. What's your problem with it?

The lowest form of wit.

Oh no you don't, il duca. Brendan split this thread off from another one. In that original thread, there were two complaints from others about your smarmy arrogant commentary (one was removed - the other one is still there). So on that basis, I don't care for this particular grievance of yours. What's good for the goose...

And getting lower.

See above.

And getting lower. I thought you were following the metaphor. The "exam" is the list of questions you posted under the title "The Attributes of a Good Store of Value". And you didn't see fit to include intrinsic value or government management?

I don't care for your faux nomenclature. The graphic clearly is a comparison of BTC, Gold and FIAT from the point of view of the attributes of a good store of value. As regards the consideration of 'intrinsic value' and 'government management', show me where those 2 items are set out by the Federal Reserve in their consideration of such characteristics ?

To be fair to Vijay he did not have that title on his graphic and it was fair enough in context.

It was explained to you that the graphic is part and parcel of the overall analysis. It appears within it - under a section titled 'The attributes of a good store of value'.

Intrinsic value and government management are very relevant to "store of value" IMHO.

In the case of the first one, you're a hypocrite - because right now in your wallet you have Euro notes that have NO intrinsic value - nada. Other than that, the Federal Reserve disagrees with you - the writer of that analysis disagrees with you and I disagree with you. Provide an authoritative independent citation that includes these two characteristics as fundamental to the formation of a store of value.

I explained how it was tethered to the real economy in what you described as a long winded and off topic way. I will not repeat it. I did not regard a picture of bank notes in a Lebanon street as a refutation of my assertion no more than I would a picture of some third world police brutality as proof of the evils of policing for my society.

Ahh...we're back to the wrong type of FIAT money again! Brilliant. I think you need to think that through a bit more. What you are saying is that you could have a FIAT in one country and a similar FIAT in another country and depending on who's in the monetary wheelhouse, it may or may not have intrinsic value based on that? Yeah, that makes complete sense!

 

[Duke of Marmalade]

The graphic clearly is a comparison of BTC, Gold and FIAT from the point of view of the attributes of a good store of value. As regards the consideration of 'intrinsic value' and 'government management', show me where those 2 items are set out by the Federal Reserve in their consideration of such characteristics ?

Last year, you sold your game system to your friend Jimmy for $125 in cash. You’ve been saving that money in a shoebox under your bed. You are saving the money to buy a new computer next year. What is the primary function of money exhibited here? (Store of value)

I include this to put in context the level of explanation of money that we might expect from your link. The tether to the real economy which I explained (badly) would I think be a tad over the head of someone who is expected to stash their money in shoe boxes under their beds. Heck, you found it difficult to understand your good self.

Anyway, amongst the 6 attributes of money your link cited were acceptability and stability. I see Vijay dropped these two from his graphic. Bitcoin would certainly be bottom of the class on these two subjects - no, no I am not accusing Vijay of bias.

A key instrument in stability is the integrity of the balance sheet of the banking system - that lending is for credible economic purposes. This is the tether to the real economy which I tried to explain and which you refuted by showing pictures of bank notes in a Lebanon street. I do not live in the Lebanon.

Who’s largely responsible for ensuring that people continue to trust that our currency is valuable? (The Federal Reserve)

Ooops! I've had my Fax Machine moment. I was wrong about "government management" - indeed I agree with you that that could be a bad thing. I meant to say it was managed by a central institution independent of government but endowed with powers to achieve its main aim of maintaining stability in the price level.

 

[Firefly]

Bitcoin and digital assets are a new asset class.

I believe you have made this point more than once. Bitcoin is on the go for about 9-10 years. It received widespread coverage 18 months ago in relation to its value.

Would you mind telling us when you think it will no longer be "new"? An approximate year would suffice.

 

[Leo]

Well, how are they doing that right now with a ban in place? And perhaps it's not a case of buying in. Perhaps it's a case of the exchange of goods and services for proper (decentralised) digital currency.

With difficulty where bans are in place I'd imagine. I still don't see much evidence of any broad adoption for buying goods or services. With the lack of real options there, the lack of guarantees about being able to retrieve money from cryptos will put a lot of people off.

So I guess my point is that - sure, it's a totalitarian regime and they can push it back - but it's peer to peer money - I'm not sure how they can prevent its use.

Pretty much every developed nation restrict access to certain portions of the internet, totalitarian regimes take that a lot further. China tolerate a certain amount of VPN usage that bypasses the great firewall, but they can and do occasionally restrict that access.

I'm a bit hazy as to how this pans out - in the same way as when I considered Libra when it was proposed last year, I wondered about the ability to trade it back and forth with decentralised crypto. I'm unsure how this pans out - in the Chinese context. Could decentralised exchanges be used?

I haven't seen full specs of the Chinese offering, I doubt the full details will ever be made public. But they could very easily restrict or block use of their centralised currency based on the user's Social Credit Score as the already do with interest rates on credit for example (j-walk, your loan rate goes up!)

We don't know how people will start to react to totalitarian-friendly CBDCs either. It could end up being the greatest on-boarding initiative for decentralised currency. Who knows.

Very true, perhaps China might leverage it's position over developing nations to force them on-board. I wouldn't be jumping on board with those, but people will always take risks where they believe there might be money to be made.

 

[Duke of Marmalade]

Oh no you don't, il duca. Brendan split this thread off from another one. In that original thread, there were two complaints from others about your smarmy arrogant commentary (one was removed - the other one is still there).

It's a well known feature of these internet debates that the "winner" attracts accusations of arrogance whilst the "loser" gets sympathy votes. Both have been observed in this debate. At the personal insult level I couldn't care less but from the point of view as to who is making the most persuasive argument I prefer to be on the arrogant receiving end.

 

[Firefly]

The Attributes of a Good Store of Value​

(For anyone who would like to delve a little deeper into the characteristics of sound money, you can find that analysis here.)

In the picture above Bitcoin scores an A for "Censorship Resistant". Doesn't seem right to me given what you are saying below..

With cash, there's no knowledge of where it's been. It could have been used to finance a drug deal or some other illicit practice. With bitcoin, there is pseudo-anonymity but the blockchain itself is totally transparent. The irony here is that people tar and feather bitcoin as being the tool of criminals when in actual fact, law enforcement agencies love it - as unlike cash, it's traceable.

 

[Firefly]

It is all hypothetical and I don't see it happening any time soon, and if it was to require all governments to take action, I think we'll agree the likelihood of that ever happening is slim to none. However, it's not as far-fetched to imagine the US getting spooked about loss of control, or China's growing influence enough to see them ban their institutions from allowing money to flow into or out of crypto. If that were to happen, it's going to be very difficult for anyone living there to get into or out of crypto.

With it being traceable n'all

 

[tecate]

I include this to put in context the level of explanation of money we might expect from your link.

From the bizarre to the sublime...
I see - the link - which is from the Federal Reserve (a CB which you are the champion of - not me!) - is below your standards? Sure, that makes sense.

Clearly, it's an example of someone using dollars for the purpose of a store of value. Who's suggesting it's a good store of value though!!?? As per your fax machine guy and the Keynesian monetary policy he spouts and we're all currently stuck with, poor little Jimmy is getting screwed and he doesn't even know it - with the few per cent inflation each year that comes off of the value of his $125. Have a look at that graphic/comparison again there Dukey...I think you'll find that little Jimmy needs to take a hard look at his choices in life (He's obviously been led astray by some condescending tool along the way).

The tether to the real economy which I explained would I think be a tad above someone who is expected to store his money in shoe boxes.

Clearly, little Jimmy isn't going to understand it - most people don't really appreciate the stealthy effects of inflation when they try to use FIAT money as a store of value. Little Jimmy doesn't understand how the intrinsic value was taken out of FIAT money when they dropped the actual gold standard at Bretton Woods in 1944 and the USD based gold standard in 1971. That's the point at which FIAT stopped having intrinsic value.

Heck, you found it difficult to understand your good self.

What I understood was that whilst what you had written was very interesting, it had nothing to do with intrinsic value. If the gold standard was in effect, then it would have intrinsic value. Without it, it doesn't.

Anyway, amongst the 6 attributes of money it cited acceptability and stability. I see Vijay dropped these two from his graphic.

You seem to have a comprehension difficulty. Boyapati produced a graphic that itemised the characteristics of a good store of value. The items from the other list relate to good money (as in transactional money). Although related, there is a distinction between the two and the characteristics between the two. So it's not a case that Boyapati 'dropped' them. He discusses both items in the course of his analysis.

Under the section titled 'The Evolution of Money', he has listed the stages in the evolution of money. No.3 is that of Medium of Exchange. It comes into play once that money is established as a store of value. As I've mentioned in umpteen posts over the past week, bitcoin is at a formative stage in terms of its development as Digital Gold and a store of value in it's own right. Covered in the same section is the question of stability. Ergo, once established as a store of value, volatility drops. So you're quite happy to accuse Boyapati of bias (because of your own) by conveniently overlooking this detail. He didn't 'drop' anything.

no, no I am not accusing Vijay of bias.

See above - you were but that's been exposed for what it is (your own bias).

A key instrument in stability is the integrity of the balance sheet of the banking system - that lending is for credible economic purposes. This is the tether to the real economy which I tried to explain and which you refuted by showing pictures of bank notes in the Lebanon. I do not live in the Lebanon.

And I'll explain to you again - FIAT money has not had any intrinsic value since the dropping of the gold standard. It's covid infested cotton. On a good day, it can be used as a means of exchange. On a bad day, it could end up discarded in the gutter as per that picture I posted of a Caracas street).

Ooops! I've had my Fax Machine moment. I was wrong about government management - indeed I agree with you that could be a bad thing. I meant to say it was managed by central institution independent of government with the main aim of maintaining stability in the price level.

You're more than welcome to link to any authoritative source to back up your claims....or I guess 'any' source would be useful. Whenever you're ready - in your own time your Dukeness.

It's a well known feature of these internet debates that the "winner" attracts accusations of arrogance whilst the "loser" gets sympathy votes. Both have been observed in this debate. At the personal insult level I couldn't care less but from the point of view as to who is making the most persuasive argument I prefer to be on the arrogant receiving end.

A measure of the 'man' right there. Neutrals can make up their own minds, your dukeness.