What does Bitcoin look like under "the hood"

breighton ^ | 14 december, 2021 | Gabriels' Horn

[politicket]

You sound more John Maynard Keynes than Ludwig Von Mises.

I'm neither one.

All money is backed by debt. If all debt is paid off then money goes to 0. Basic math.

[Wildbill22]

All money is backed by debt. If all debt is paid off then money goes to 0. Basic math.

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I’m sorry, but that is counter intuitive...not basic math. It is suppose to be debt being backed by hard assets in basic banking, not money being backed by debt, otherwise why seek hard assets to justify loans, though it sounds like the justification our Federal Reserve operates. Debt is slavery, and hard assets are freedom. While that may be zero sum, the absence of debt does not mean the absence of hard assets or value. Quite the opposite, otherwise nothing has value to start with, other than debt/slavery.

Money has value because it has scarcity as one of the principle characteristics that give it value..
- Less debt, or zero debt, means more scarcity as the money supply shrinks, but the value of the currency increases, not decreases, just as when you increase debt and the money supply, you decrease the value of your currency. That is the basic supply/demand principle of Econ 101.

Perhaps we will never agree on that one.

I am obviously a fan of Mises, and Hayek and the Austrian School.

[politicket]

What does the US government do when they want to increase the money supply?

Answer: Treasury auctions run by the Fed. (Bills, Notes, Bonds, etc.).

What do those instruments being auctioned represent?

Debt. Also known as a "promise of the future labor of US citizens.

All money assets are backed by debt on the opposite side of the balance sheet.

[norsky]

It what way would you think a “virtual currency” was real? ,,,,,,,,,,,,,,,,,

well, you can purchase stuff with it sometimes, like a Tesla

[politicket]

I’m sorry, but that is counter intuitive...not basic math.

Maybe the following article will help - although there are points I disagree with in it - such as the fact they never identify what debt truly is - claims on future labor.

Money in the modern economy: an introduction

[GunRunner]

Proof of work will be replaced by proof of stake once everything moves to the Lightning network.

Halving only applies to miners, and most Bitcoin holders don’t mine, so Bitcoin is in no way inflationary as a medium of exchange or store of value.