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falafel-picante's Comments

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Should Bitcoin Peg Itself To The Dollar?

Commented Apr 28, 2013 at 12:22:52 in Business

“"The Chinese workers [...] can't afford the goods they make for Apple and hundreds of other companies" because they're paid in an artificially cheapened currency. One of Bitcoin's many virtues is that it can appreciate as economic productivity increases (and as more people enter the "Bitcoin Economy").”

mideava on Apr 29, 2013 at 06:47:15

“Bitcoin has a price and a monetary value. In exchanges, Bitcoin is a commodity, thus having a price. In the Bitcoin network, it is money, thus having a monetary value. These two values are independent of each other so I could pay $100.00 for a bitcoin (in an exchange) then buy something more valuable than that with the same bitcoin directly (in the Bitcoin network). Even so, the exchanges would still be viable not only for buying but also for selling bitcoins, provided the spread between their price and the monetary value in the Bitcoin network did not surpass the cost (liquidity, affordability, etc) of any competing alternative. Additionally, this would introduce an economic incentive to stay in the Bitcoin monetary system for actual monetary transactions, only going back to the fiat one when politically necessary, which is far from being an irrelevant result. Finally, if something goes wrong, it is only a matter of releasing the peg.”