73 thoughts on “The Economics of Bitcoin | Malavika Nair”

  1. Value is based on supply and demand.
    Difference between Gold and Bitcoin is that if people stop using them for monetary exchange Bitcoin will be worth 0 and Gold will be worth something greater than 0, but that amount would still be much lower than it is today.
    It is personal fiat (I think it so) that gives anything value. It is government fiat (I declare it so) and force that gives the dollar value.

  2. I bet it will dip down after the 31st for some time. I think we'll see another saddle of sagging valuation for a bit, and then it will ramp up again. I bet we'll see $10,000 at the next peak. I really need to buy in when it dips.

    More importantly, we need to get Amazon to accept Bitcoin. Once that happens, all bets are off. Bitcoin should go wild with mass adoption. Everyone will flock to it.

  3. For the average person… Bitcoin feels like a closed community… It's not like you can just go and "get one"…

    I am smart enough to know what will happen if Amazon starts accepting it…

  4. She doesn't understand how economics works, what bitcoin is and what it is for, nor the relationship between the two. She would be quite interested in hearing me explain, I'm sure of it.

  5. The libertarians have been fucking with bitcoin too much. They as a ideology are proving themselves unfit to wield the infinity stone that is Bitcoin.

    The real Bitcoiners to follow are the Cypher Punks who expressly reject the idea of top down control of the protocol.

  6. Define 'intrinsic' and 'fiat', because fiat certainly has no intrinsic value. If 'intrinsic' means innate, inborn, congenital, then gold also has no intrinsic value. To have value, gold must be scarce! Gold is anything but scarce with 'paper promises of gold' outnumbering real gold contracts, 500 to 1. This 'artificial gold' in the form of paper makes gold not scarce, but abundant! The price is being manipulated with fake gold! These promises are NEVER kept! The contracts are settled in fiat, which is an artificially low price for gold and so the investor of 'paper gold' got 'experienced' by the big banks!
    It's hard to believe that Malavika Nair believes that deposits in banks are insured by the FDIC! 36:36 min How naive can anyone get? The FDIC has no money! They need $1 trillion to cover the losses of the worst 25% of banks and they don't have ANY money! They claim to have $48 billion, but that figure comes from charging banks three years in advance for deposit insurance! This isn't real money! It's accounts receivable on receivables that aren't yet due and won't be for up to three years! Don't say this, publicly again, PLEASE! This is a lie! You should know better!

  7. "Whatever it is, it is definitely not a bubble" – Correct, this is not a bubble. It's a series of bubbles, one after the other. That could explain the extreme fluctuations in price we have seen over time.

    "People accept BTC in exchange to goods and services" – some people do, but they are a tiny minority. Most of the people who hold it are just speculators looking to make a quick buck. They do the same with high tech stocks. Does that mean that stocks are money? of course not.

    "By elimination, Bitcoin is closest to commodity money" – now that is pure BS. Bitcoin is nothing like commodity money, because it lacks the main aspect of commodity money which is intrinsic value. Intrinsic value means that the money has practical industrial uses beyond serving as a medium of exchange, and Bitcoin has none.

    "We should be supportive of it, because it is creating a choice" – we should not be supportive of it, because it offers a very bad alternative to government-issued fiat currencies, and diverts attention away from real commodity money such as gold and silver. As a matter of fact if it eventually fails it may be used by the governments as an example of why market based solutions are bad.

  8. Crikey Moses ! There are just about enough punctuations of this far-right babble with " Right..? ", " Cool ", ..the same page ", and almost every other exhausted gap-filler that you could muster up, to render this utterly unlistenable.

  9. Bitcoin is the beginning of the end of central banks and fiat currencies. It's time for economists to wake up that there is more to human motivation than profit! As she discuses the proliferation of open source. Beyond bitcoin are the introduction of Etherium protocol with its smart contracts and the Bancor protocol with liquidity all built on block chain. The introduction of local currencies will democratize money in a completely new way!

  10. I would like to hear some great arguments against bitcoin in particular and crypto in general. Best comment (by likes and my personal fetish) will get a 0.005 BTC. Go. Be specific. I'm excited

  11. Yes, it's already happened. Japanese government had approved that merchant purchased with bitcoin will be waived 8% consumer tax.

  12. This is one of the best presentations explaining what bitcoin is, why it has value, and where that value comes from. Every free-market libertarian should listen and consider this talk when evaluating bitcoin's value proposition as a medium of exchange.

    I firmly believe if every libertarian got 1 bitcoin right now, and started using it as money, we'd have a vastly more free society in the next decade. Ending the FED through political means is very unlikely to happen, with bitcoin (cryptocurrencies in general) we can bypass the FED completely using this technology. Embrace it and we will succeed.

  13. Your definition of 'money' better fits 'currency'.

    Can you define money and currency and tell us the difference between the two? (And yes, each of them can be defined)

  14. The USA dollar isn't 'backed' by ANYTHING! You can't bring it to a bank and demand anything but a different denomination in return. 'Legal Payment' isn't 'backing'. The dollar is no longer backed by gold or anything else.

  15. For long-term success, bitcoin needs to be backed by a percentage of gold that eliminates the chances of total loss. The amount of gold backing bitcoin should increase over time. The more backing in gold (or silver) the more trust there will be and the wider it would be used. The problem is that reliable gold backing is hard to do.

  16. "What is money" is the most boring question ever. Just use the word "thing" and we don't have to talk about its definition.

  17. I thought this was an interesting seminar, what I did not get was to me a very important aspect of the understanding. The Lady did not explain how you put your money "into" bitcoin or receive it??? How do I take cash, employ bitcoin to transact, or, receive?? Was this information imparted in a way I missed it? Bit coin seems to be a very good idea, but how do we those who are new to it, experience it? Can anyone help me understand this, or direct me to a video that explains easily how one actually begins to employ the system? When one receives bitcoin, where is it stored? In what manner is it displayed when stored? A great deal of information was not delivered. Can anyone fill me in with these facts?Thanks

  18. The monetary incentive for users it the fact it's value increases over time, its way faster than a bank transfer and when doing it across borders its way cheaper. There's no lose to banks for wire transfers costs, commissions and poor exchange rates. You control it and no one can devalue it by printing it. There are so many reasons for cryptos and this is why we are seeing the smart money and those that see its potential moving into this space.

  19. Every few hundred years, a new currency is born. BTC has ushered in the new currency, running on the very thing we seem to live on; computers. Where else would a new currency be born but on the net? I look forward to it, and if it weakens the bankers grip on humanity, then all the better. If the power goes off, then ATM's wont' work, nothing will work, so that is just a very weak argument, one I used for years. In another few hundred years currency should be dropped altogether, if not sooner. And as for the current currency, try carrying $50.00 worth of coins around, and you will soon see just how old fashioned it is. Along with the idea that banks control the money supply.

  20. I was disappointed that she skimmed over the proof of work, it's largely the reason why it has value, it's backed by math, good math.

  21. Just a quick correction at the 5min mark – miners' main duty is to ADD blocks of transactions to the blockchain, it is the job all all network nodes (whether mining or not) to do the verification to ensure that all transactions are valid and that any miner cannot cheat.

  22. There is a major drawback to all, digital currencies. In the words of Sylvanus P. Thompson: "What one monkey may do, so may another." Bitcoin is merely the very first digital currency using the blockchain technology. Since then there have been numerous others and the number of competing digital currencies is increasing at a rapid pace. Also, stop and think what a government might do with the blockchain. Can you imagined the Federal Reserve Bank of the United States issuing a thing called FedCoin? I can, and I shudder every time I do.

  23. At 32:30, I think she is wrong. There is a cost to staying in dollars. Inflation. All Bitcoin has to do is maintain it's deflationary properties to compete against the US dollar. That's enough to have people switch from Dollars to Bitcoin.

  24. Check out Binance right now at plus earn www.binance.com/?ref=16090961 interest on the cryptocurrency every day easily by deposting money on a per day basis

  25. Lady, you're explaining something that does not exist.

    You need to go to the real economy and see what you can make with it – virtually, almost nothing.
    On the trading side, see the business model around it (commissions. To trade the DAX you have a 0.8 spread basis. To trade BTC you get a 90 point spread) … and understand how things work. Do open a trade and see how reality works. You can't know without experiencing.

    Nothing is more centralized than BTC – pls refer to actual ownership data. Pls do it and see how ownership is distributed.
    The fundamentals are Zilch. There is nothing besides lots of mumbo-jumbo and emotions.

    E-money, as Friedman foresaw it, will be real in a couple of decades indeed … but what we have now are fake predatory quasi-variants on a heavily centralized system. This is only the begin and will take a while until it gets somewhere.

    This talk you have there, is third world obscurantism.

    Fiat is created out of thin air and loses value w inflation … but you have a strong network that uses that money (each and every country population to start with) and you can buy anything w that money and you don't get to pay 10% in fees to get it to your hands nor will it fail in case of a power shortage. Fiat is bad but far more robust variant around. Gold is a store of value while BTC has zero intrinsic value.

    Our problem are central banks and governments (and their rogue policies) …. not money. Act of the problem and look forward to legit substitutes w a slight level of trust. Last thing the quasi-cryptocurrencies inspire today is trust – and rightly so, they're not more than just a scam.

  26. Nice talk! The most obvious answer to the question as to why the number of wallets went down (short term at the end of 2017) seems almost surely to be that there was a class of short-term bandwagon riders who jumped in, profited, then jumped out. I've met a few of them.

  27. What monetary incentive for customers? You will see when inflation strikes 🙂 FIAT money steal us every time our goverments and banks decide to print money… The more crisis the stronger Bitcoin will become, and crisis are coming all along.

  28. Your so much better than most Austrians, however most money in the West is credit money. This money credit as part of a loan (much like a bond), so all mortgages create loan money

  29. Open source does not mean free. It means that you can alter the code. Just a little clarifying point. to your otherwise excellent talk

  30. Open source software is just like public interfaces (USB ethernet etc) and is supported by people who get paid because they build products on top of it.

  31. Companies create money all the time, For instance, rewards points, coupons and see bitpesa in Africa, which is using cellular minutes as a digital currency.

  32. If you want to understand bitcoin values then read this paper:

    https://github.com/lopezdp/MachineLearningResearch/blob/master/CryptoCurrencyResearch/PricingResearch.ipynb

  33. If only she'd use "right?" less…despite that, this is extremely helpful!

    fun fact: you could pay your taxes with bitcoin in my hometown

  34. Isn’t one of the biggest downsides of bitcoin that it might be prevented from becoming the best competitor in the “money industry” by government regulating or even banning it? I’d say that’s another big concern for some entrepreneurs other than what she mentioned.

  35. I hope there were much more discussion about bitcoin and blockchain and the other cryptocurrencies from the Austrians. I see them as the champions of sound money and free-markets, which blockchain can help us to bring back.

  36. I like bitcoin. If there is a crash then its the end of all the bitcoins. Also some people know there's always a crash.

  37. Bitcoin is FOMO phenomena. Also its like the coin used in the movie John Wick. It can work only when internet becomes powerful than all the things of the world even governments.

  38. can you exchange share of a company to buy goods. answer is no because it doesn't trade at par value. similarly merchant might get 0% transaction fee but bitcoin will lose its value 10%. whats he gonna do then.

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