tag:blogger.com,1999:blog-6704573462403312459.post8040473570751302268..comments2024-03-28T06:53:23.473-04:00Comments on Moneyness: Milton Friedman and the mania in "copy-paste" cryptocoinsJP Koninghttp://www.blogger.com/profile/02559687323828006535noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-6704573462403312459.post-84112192360158755692013-06-30T07:44:00.816-04:002013-06-30T07:44:00.816-04:00Off-topic, but wow! This is a pretty amazing list....Off-topic, but wow! This is a pretty amazing list. Any thoughts or additions?<br /><br />http://www.freebanking.org/2013/06/30/monetary-economics-a-reading-list/John Snoreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-17150803495040995172013-06-29T00:39:44.374-04:002013-06-29T00:39:44.374-04:00Good point about the spreads.
When I was writing ...Good point about the spreads.<br /><br />When I was writing that comment it did occur to me that the tax argument would apply, but also I believe the ability to evade taxes (income, sales and other). <br />Depending on whether the government-issued coin (Galt-Coin? ;-)) would be anonymous or (more likely not), it would command a small premium. For example if I could easily order cigarettes from a state with a lower tax and save 10%, I'd pay 2-3% premium for Galt-Coin. <br />So Galt-Coint would be at least equally worth as cash, but the government couldn't offer 1:1 cash convertibility unless they had the ability to completely control how it is used, which I think shows that black market in Galt-Coint could work only with additional totalitarian controls (such as the government-issued e-Wallets tied to SSN or something). The same argument shows why philosopher kings like the one quoted at the top are so much in favor of eliminating cash :-)Anti-Collectivisthttp://anticollectivist.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-78251096983545742392013-06-27T08:12:36.807-04:002013-06-27T08:12:36.807-04:00"I'd like to know if there's a limit ..."I'd like to know if there's a limit to number of alt-coins that merchants are willing to accept and how is it determined. In theory they shouldn't care as long as they can instantly and cheaply convert them into Bitcoin on US$, but who can possibly want a 20 entries long drop-down list with a list of accepted alt-coins?"<br /><br />Having looked at the markets for some of these coins at Cryptsy, I don't think any of them can be instantly/cheaply converted into Bitcoin at their current price. The spreads are wide and the market is illiquid. A merchant who accepts LuckyCoin, for instance, risks having to sell their LuckyCoin at a massive discount in order to own bitcoin. They could put up an offer to sell LuckyCoin at the current price, but it might take days or weeks to get filled, exposing the merchant to exchange-rate risk. I just don't see why they would expose themselves to the hassle of accepting copy-paste coins, at least until they attain a sufficient degree of liquidity.<br /><br />"By the way, I am curious whether a government-issued alt-coin would trade at a discount to cash..."<br /><br />That depends. Would it offer 1:1 cash convertibility or accept the coins in the payment of taxes? If not, my guess is that the rate would float and have no relation to the price of cash.JP Koninghttps://www.blogger.com/profile/02559687323828006535noreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-22072037812122967682013-06-27T03:01:14.942-04:002013-06-27T03:01:14.942-04:00Pne more observation: surely there is market for p...Pne more observation: surely there is market for professional alt-coin foundries which would maintain the s/w (server/client code, docs, auditing, etc.) in exchange for a fee (say, a right to pre-mine or insta-mine for up to X % of circulation or Y days or something like that).<br />The process of hacking away (while making embarrassing mistakes - too bad messed up software clients have no collector value) for a small gain seems terribly inefficient, unprofessional and not secure. <br /><br />--<br />Anti-CollectivistAnti-Collectivisthttp://anticollectivist.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-90281688306596464912013-06-27T02:52:48.300-04:002013-06-27T02:52:48.300-04:00I think the early mover advantage is significant a...I think the early mover advantage is significant and I'd even say that the advantage is influenced by the amount of infrastructure investment and brand awareness that each alt-coin has. <br /><br />The minimum value of copy-paste alt-coins is probably due to their semi-compatibility with all the existing Litecoin infrastructure (otherwise without ways to inexpensively make them circulate many would already be worthless). That's where I see a similarity with counterfeit Somali shillings.<br /><br />Personally I love the fact that there are so many alt-coins of copy-paste kind because that incentivizes alt-coin merchants and ISVs to use/build interfaces to different alt-coins. However since all but Bitcoin and probably Litecoin are of very questionable viability, I'd like to know if there's a limit to number of alt-coins that merchants are willing to accept and how is it determined. In theory they shouldn't care as long as they can instantly and cheaply convert them into Bitcoin on US$, but who can possibly want a 20 entries long drop-down list with a list of accepted alt-coins? At some point the merchant may want to push the complexity back to the user and limit the choice to say "top 5 fastest-circulating coins in region" (or other formal or informal group).<br /><br />By the way, I am curious whether a government-issued alt-coin would trade at a discount to cash (I guess it should because with cash one gets better anonymity and can avoid paying various taxes) and how much would that discount be.Anti-Collectivistnoreply@blogger.comtag:blogger.com,1999:blog-6704573462403312459.post-67649633463611089922013-06-26T23:04:13.412-04:002013-06-26T23:04:13.412-04:00Just because you misapplied his theory doesn't...Just because you misapplied his theory doesn't mean Milton Friedman was wrong on this one. He is wrong about a lot, but not this.<br /><br />Altcoins are not bitcoin clones. Even if the code is the same, the transaction history is different. Altcoins are not compatible with bitcoin or each other.Larryhttps://www.blogger.com/profile/08385731866975962150noreply@blogger.com