User talk:SyaWgnignahCehT

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Why has NASA never returned to the Moon?

The article talk page is for changes to the article, not general discussion.

If they faked the landing, why would they fake it six times? The Apollo Moon landings were very dangerous - they didn't want to risk losing people. Also, it was a "been there - done that" type of thing. Even while the landings were going on, Congress approved of the Space Shuttle program. That was the next big thing. Also, there was no hardware. Three Apollo capsules were used in the Skylab project. One was used in the Apollo Soyuz Test Project and one was kept for a possible rescue, and that is all there were. After Apollo 18 and 19 were cancelled, some of the Saturn V stages were not completed and late-model Lunar Modules were not completed. (An earlier-model unused LM did exist.) So the hardware didn't exist. Meanwhile NASA turned its attention to Skylab, the ASTP, and the space shuttle. Bubba73 ^{You talkin' to me?} 05:07, 24 November 2013 (UTC)

It is obvious to me that you haven’t read my comment on the article talk page (except for the title). I was not having a general discussion – I proposed a change to the article. Plus, you would have figure it out that I don’t think the landings were faked. SyaWgnignahCehT (talk) 20:19, 24 November 2013 (UTC)

I apologize. But offhand I don't know of any reliable source that addresses that. And the above is just my take one it, which doesn't count as far as the article. Bubba73 ^{You talkin' to me?} 21:50, 24 November 2013 (UTC)

Discussion about money and Bitcoin in particular (copy of the original text)

Recent edit replacing a youtube video from external sources (Source: Talk:Bitcoin_network)

Hi all, recently I removed a youtube video from the external sources replacing it by a more reputable Khan Academy source. The reason is that Youtube videos generally are not reliable sources of information, while the Khan Academy's sources are much more reputable. I also checked a part of the video and found out it contained serious inaccuracies. Ladislav Mecir (talk) 17:06, 14 October 2014 (UTC)

Serious inaccuracies? I’m very much interested in what inaccuracies you have found. Claims like this have to be substantiated with evidence. SyaWgnignahCehT (talk) 18:07, 14 October 2014 (UTC)

I watched only the start, but once the speaker mentions that bitocoin is a "fiat" currency and knowing that for a currency to be fiat, it has to be declared as a legal tender, which bitcoin is not, etc. Ladislav Mecir (talk) 19:21, 14 October 2014 (UTC)

This is a direct quote from the video: “The numbers [i.e. bitcoins] only have value because we believe they have value just like any other fiat currency.” This was indeed a poor choice of words, because it implies that bitcoin is a fiat currency, which is not. To remove ambiguity is should have said “…just like with fiat currencies.” However, it is still a perfectly good video to explain how Bitcoin network works. If anyone wants to check it out and possibly reintroduce this link into the article, here it is: How Bitcoin Works I’m not going to push this anymore. SyaWgnignahCehT (talk) 20:28, 14 October 2014 (UTC)

To remove ambiguity is should have said “…just like with fiat currencies.” - funnily enough, bitcoin is not "just like fiat currencies". If it was, we would not discuss this. Ladislav Mecir (talk) 00:52, 15 October 2014 (UTC)

I did not say that bitcoin is "just like fiat currencies". I merely stated that bitcoins only have value because we believe they have value, just like with fiat currencies. (As opposed to commodity money). I don’t really care if you see the difference, but I will not put up with you misquoting me. If you are so precise with words when criticizing a video, then the same standard should apply to you also. SyaWgnignahCehT (talk) 11:53, 15 October 2014 (UTC)

It looks that my previous text was not understandable, so here is a different explanation: the problem with stating that bitcoins only have value because people believe they have value just like with fiat currencies is that it is highly inaccurate. In the (already refuted) objective theory of value it can be easily seen that the sentence is false. In the generally accepted subjective theory of value it is not accurate either, since in it everything has value only because people believe it has value, so the sentence is misleading in the sense that it is trying to suggest that there is some special (actually nonexistent) similarity between bitcoin and fiat money. Ladislav Mecir (talk) 12:37, 15 October 2014 (UTC)

So, basically you are saying:

1. Everything has only a subjective value (e.g. I might want or need a product or service at a certain time and place, but maybe not at another time or place; other people might have different wants and needs).

2. Laws of supply and demand then determine how much I value (i.e. am willing to pay for) a certain product or service at a specific time and specific place.

3. Since value is subjective and always changing, things don’t have any inherent value.

4. Because there is no inherent value in things, everything has value only because people believe it has value.

I guess you could make a philosophical argument like this, but this is as insightful as saying that people are collections of different atoms. It has zero practical use in everyday life. For all practical purposes, commodity money, such as gold or silver, has some inherent value in the context of our civilization, because these metals also have industrial uses.

Bitcoin does not have any other use besides being a currency. Neither does fiat money. (Obviously there is some material substance to it – yes, you could start a fire with a banknote, or heat your home with a bitcoin mining rig – but this is trivial). SyaWgnignahCehT (talk) 16:39, 15 October 2014 (UTC)

This is an interesting discussion, and I do agree with your points #1 to #4. That said, I disagree with your formulation: "Bitcoin does not have any other use besides being a currency." That, in von Mises's terminology can be formulated as: "Bitcoin does not have any direct utility." If you are interested, we can discuss the issue privately (let me know at User_talk:Ladislav_Mecir, if you are interested), but the discussion got too far from discussing the contents of the Bitcoin network article, so I do not want to pollute this page. Ladislav Mecir (talk) 17:02, 15 October 2014 (UTC)

Bitcoin vs. commodity vs. fiat money (Source: User_talk:Ladislav_Mecir)

Ladislav Mecir wrote: I disagree with your formulation: "Bitcoin does not have any other use besides being a currency." That, in von Mises's terminology can be formulated as: "Bitcoin does not have any direct utility."

I don’t fully understand what you mean, so correct me if I’m wrong:

• Direct utility for gold would be its use as (whatever you can do with gold as a material).
• Indirect utility for gold would be its use as a currency.

• Direct utility for Bitcoin doesn’t exist (according to von Mises's terminology).
• Indirect utility for Bitcoin would be its use as a currency.

Is that a correct understanding of your quote? SyaWgnignahCehT (talk) 18:59, 15 October 2014 (UTC)

Is that a correct understanding of your quote? - the essence is:

• Direct utility of gold is whatever utility people attribute to gold, if said utility does not depend on it being a currency.
• Direct utility of bitcoin does exist. Ludwig von Mises's Regression theorem proves that every currency must have had a direct utility before becoming a currency. For example, USD was redeemable for gold until 1971, i.e., the original direct utility of USD is the same as the direct utility of gold. In case of bitcoin I demonstrated what it is here. Ladislav Mecir (talk) 19:40, 15 October 2014 (UTC)

1. Well, Ludwig von Mises's Regression theorem must be wrong then. Not every currency must have a direct utility before becoming a currency. Fiat currencies don’t have to. A government can issue a brand new currency by decree and it will have a value, because you can pay taxes with this currency (and most likely ONLY with this currency), so there will be demand for it (to pay taxes). The government thus incentivizes the use of this currency, but there is no utility to fiat currencies beforehand.

First of all, thank you for reading the text.

To the Regression theorem: there is no known counterexample to it, and there is some reasoning behind it. You probably did not have the opportunity to read von Mises's books, but, as I demonstrated above, e.g., USD is not a counterexample, and you would be famous if you succeeded to find one.

The history of U.S. dollar doesn’t change the facts above.

2. It is doubtful that Bitcoin started as a collectible. The very paper by Satoshi Nakamoto that started all of this was titled “Bitcoin: A Peer-to-Peer Electronic Cash System”. The first sentence of the abstract says:

“A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.”

Yes, but the paper was:

• written before the inception of bitcoin, and did not describe the actual state (since bitcoin did not even exist)
• bitcoin was not money before its inception, similarly as it was not money at the moment of its inception (you could not go to a store and buy something with it)
• Bitcoin is still not money, since it is too hard for anybody to use it as a common medium of exchange. Wherever you are, it is much more likely that you would need to use fiat money. There is substantial evidence that bitcoin is still mainly a collectible occassionally used as a medium of exchange, but the use as a collectible is dominant.

This sounds like a currency by design to me.

The design is one thing, but currency is an employment. It is possible to design properties like fungibility, scarcity, divisibility, recognizability, portability, but it is not possible to design the fact that everybody will accept it as money at the very moment of its inception. That shall either take time as von Mises pointed out, or not happen at all.

3. Of course, once the currency is established (fiat or Bitcoin), it can then also become a collectible (your own quote: “Numismatists generally agree that currencies and similar objects are directly useful as collectibles”).

Well, take commemorative coins as an example. They may have some face value (or, maybe not, it does not matter much), but only stupid people use them as money, especially if they acquired them for more than their face value. Such coins may actually never become money, remaining "just" money-like collectibles all the time.

4. Conclusion: fiat currencies and Bitcoin are currencies by design (by government and by crypto-nerds, respectively). They are similar in that regard.

On the other hand, commodity money did not become money by design. It truly did have a direct utility before becoming a currency, and the reason that it then also became money was its usefulness as a currency (e.g. gold is rare, relatively easy to carry around, divisible, malleable…). SyaWgnignahCehT (talk) 23:02, 15 October 2014 (UTC)

Perhaps interestingly, take gold as an example. Before it became money, it had certain properties like electric conductivity, e.g., but do you think that before gold became money anybody used gold as a conductor? It is much more likely that the first owners just found some electrum (alloy of gold and silver) in the nature and collected it, so, the first direct utility of gold (more likely electrum) was collectibility. All the best. Ladislav Mecir (talk) 23:55, 15 October 2014 (UTC)

Nowadays, the situation is not much different, as it looks. Gold is not used as a currency (if you go to a shop with a gold bullion, you will probably find out that you are unable to buy things with it). Some gold is used by industry, but the significant majority of it is sitting somewhere collected and used as a hedge against financial crises or inflation. Ladislav Mecir (talk) 02:55, 16 October 2014 (UTC)

Since you read my text, there is yet another text by Nick Szabo you may find interesting: Shelling out -- the origins of money Ladislav Mecir (talk) 00:14, 16 October 2014 (UTC)

I am really curious whether you know any example when a currency came to existence without any history which could be traced backwards to some direct utility. All the best. Ladislav Mecir (talk) 09:03, 16 October 2014 (UTC)

My response:

1. On the subject of the Regression theorem: I do not claim that I know of a counterexample. I just explained a theoretical possibility that a counterexample could exist. Here is my thought experiment on this:

A government could issue a brand new currency by a decree (i.e. fiat), and then demand that all taxes are paid exclusively in this currency. This will establish a demand for this currency, which will give it a value. This negates Ludwig von Mises's Regression theorem (i.e. every currency supposedly must have had a direct utility before becoming a currency).

Unless of course you count the ability to pay taxes with it as a direct utility. This notion would then save the Regression theorem.

2. So now we should discuss Bitcoin. What gives Bitcoin its value? Obviously not a need to pay taxes, and it is also not backed by any commodity.

You say that Bitcoin started as a collectible (i.e. as being of interest to a collector with an urge to collect unusual and fascinating things). Being a collectible would put Bitcoin in demand, which would give it a value.

While this may be a tiny part of interest in Bitcoin (crypto-nerds being infatuated with it), I say that what puts Bitcoin really in demand is its ability to solve certain problems, and more importantly, its promise to solve certain problems in the future. What does Bitcoin promises:

• lower transaction costs than credit cards or Paypal
• anonymity on internet (sort of)
• independence from the established financial institutions

These are pretty big promises. I don’t know if Bitcoin will ultimately fulfil them, nobody knows. But the faith in Bitcoin is there. That is why I said that “bitcoins only have value because we believe they have value”. They have value now, because people believe they will have value in the future. Why? Because of Bitcoin’s promises.

That’s why I also said: “Bitcoin does not have any other use besides being a currency.” Only a tiny part of interest in Bitcoin is as a collectible, so we can disregard that.

3. But then you would probably say that currently not many transactions are being made with bitcoins. The majority “of bitcoin accounts never changed their balance.” Wouldn’t that make bitcoin a collectible?

Well, not exactly.

Functions of money are generally recognized as:

a) medium of exchange

b) unit of account

c) store of value

Not all currencies are equally good in all of these functions; additionally, some say that “the role of money as a medium of exchange is in conflict with its role as a store of value: its role as a store of value requires holding it without spending, whereas its role as a medium of exchange requires it to circulate” (Money#Functions)

I think that from the function of money c) “store of value”, follows that every currency can also give an impression of being a collectible. Money would not be a medium of exchange if it had no value, and if it has value, then this value can be also stored.

So, Bitcoin can give us the impression of being a collectible. With money you can store value, but you cannot store it unless you first “collect” it.

However, I say that Bitcoin is a digital crypto-currency. Its role as a true collectible (being of interest to a collector) is only a tiny one (in order to have some bitcoins because you are fascinated by the concept of crypto-currency, you can go with 0.01 BTC! You don’t need to collect bigger and bigger numbers – having 2 BTC feels exactly the same as having 1 BTC, except that you feel twice as rich. Bitcoins are all the same; they are just some numbers on a screen, derived from a computer network protocol. That’s different to being a numismatist and having two different physical coins that you like. Collectors collect interesting things, investors try to get rich).

4. This stands in contrasts to true collectibles, such as commemorative coins (or historic, old coins). These coins are not valuable because of their face value (which is usually much smaller). They are so valuable (to numismatists) because they are very rare physical objects.

Bitcoins on the other hand are not rare. They have a limited supply, but they are not rare. All currencies must have a limited supply, otherwise they would become worthless. (But the supply should not be so limited that it cannot serve as money, i.e. causing a shortage of money in the system – there must be a balance).

(Side note: numismatists also collect common, normal coins. But one such coin by itself is usually not really a collectible. Only the whole collection of a certain series of coins becomes a collectible worth something).

5. With regard to gold, I agree with you that its first use was as a collectible. People were always attracted to shiny objects, and even more if they were rare (such as gold nuggets).

However, I doubt that nowadays many people store gold bullions as collectibles. Plain gold bullions are not very interesting objects, apart from the fact that they are worth a fortune. Gold bullions are thus commodity money and they carry out the third function of money: store of value.

On the other hand, some objects made from gold that also have artistic value, or are rare physical objects as well, truly can be collectibles (e.g. special issues of gold coins, jewellery…). So, there is not a clear-cut distinction here. Gold can be both: money and collectible.

(As you pointed out, gold bullions are not very good as a “medium of exchange”. Gold coins are a bit better, but still quite impractical. In the past, people had no better options, so they had to use precious metals as a medium of exchange, but nowadays we have paper and digital money, so no one even bothers using gold as a medium of exchange anymore).

6. Many objects can in fact be both money and collectibles (under the right circumstances). For example, take cigarettes: I’m sure that there exist people that collect different brands of cigarettes. People collect all sorts of things. (My mother has a collection of paper napkins). But it’s also a fact that cigarettes have been used as money in prisons and prisoner-of-war camps, where the use of normal currencies was either banned or unavailable.

In my opinion, what differentiates money and other investments from collectibles is “emotional attachment”. If you collect certain item because you like it in and of itself, then this is a collectible (whether it is worth anything or not). But, if you collect it only because of the fact that it has certain value and you would like to store this value for the future (and possibly increase it), then this is just an investment (or money, if it also has other functions of money, such as being “medium of exchange”).

7. The issue with consumer products (e.g. cigarettes) as commodity money, though, is that these objects have value because you can use them, but if you use them as intended (e.g. smoke it), then you decrease money supply. So, there has to be constant influx of new cigarettes to replace all the cigarettes that are smoked.

That’s why precious metals are a superior form of commodity money, because they are not lost in such great quantities (e.g. if you use gold for jewellery, this metal is not lost in any way, just temporarily removed from circulation).

8. Recap: If you’re emotionally attached to your bitcoins, then they are a collectible. If you are not, then they are just an investment in a new type of valuable currency, just like you can trade with any currency – either fiat or commodity. And the reason Bitcoin has value is that it is in demand, and it is in demand because it solves certain problems (and we believe it will continue to do so).

Similarly, if you are emotionally attached to your gold coins, then they are a collectible. If you are not, then they are an investment in a commodity money. The fact is that gold can be used as a “medium of exchange” and historically had been. Nowadays, its primarily function is as a “store of value” (since we have better options available for exchanging). And the reason gold has value is that it is a rare metal in demand, and it is in demand because it is used for many things.

And if you are emotionally attached to your collection of banknotes (fiat), then they are a collectible. If you are not, it’s just money. And the reason fiat money has value is that it is in demand, and it is in demand because it is a convenient way to buy life’s necessities with it (and pay taxes). It is excellent as a “medium of exchange”, but not as good as a “store of value” (due to possible inflation). SyaWgnignahCehT (talk) 02:34, 25 October 2014 (UTC)

Notes:

Re "A government could issue a brand new currency by a decree (i.e. fiat), and then demand that all taxes are paid exclusively in this currency. This will establish a demand for this currency, which will give it a value. This negates Ludwig von Mises's Regression theorem (i.e. every currency supposedly must have had a direct utility before becoming a currency)."

• FYI, I do not count the use for paying taxes as a direct utility
• I actually think that it is a fallacy to state that taxes add value to a currency, since
  • every hyperinflating currency known was taxed, and taxes did not help to preserve the value of the currency
  • when a tax is introduced to an existing currency, it increases prices, which means that it devalues the currency

Re "I say that what puts Bitcoin really in demand is its ability to solve certain problems, and more importantly, its promise to solve certain problems in the future."

• yes, however, anybody acquiring bitcoin for its (potential) ability to solve problems in the future is actually handling it as a collectible at present. Like: "I know that bitcoin can't be used that way now, but there is a future potential, so I collect it now with the perspective that it becomes more valuable in the future."
• It seems that you call such a use an "investment". That is a terminological difference, which is not very substantial for me, and I can accept also the term "investment" instead of "collectible", but many (e.g. John Quiggin) use a different definition of "investment", defining it as something that generates some flow of income. A flow of income is not required of collectibles. If you do not require a flow of income then you can certainly say "investment" instead of "collectible".
• In my opinion there is no need for a bitcoin collector to be a "crypto nerd". It would be similar as requiring that every owner of a valuable painting be a connoisseur of art.
• A person liking a painting sufficiently enough to buy it, put it in his house, and look at it every day may be classified as not a collector, but as a person using the art to directly consume its artistic value, its ability to provoke certain emotions, etc.
• On the other hand, an owner putting the piece of art to his vault actually uses it as a collectible (if you do not prefer to call such a use an investment, as noted above, which may be a matter of controversion due to the absence of the flow of income).

Re: "Gold bullions are thus commodity money and they carry out the third function of money: store of value."

• this is a terminological difference. While I do not mind much about terminological differences usually, the fact is that it is nonstandard to call "money" something that is not used as a common medium of exchange. Also, in this case the terminological differences do matter, since the Regression theorem was formulated using a definition of money requiring the function as a common medium of exchange.
• regarding the store of value: The store of value function is not exclusive to money, it is present in other goods, such as collectibles. Also, the definition of money requires not just the "store of value", but the other functions. Per the standard definition, without having the other functions, the commodity is not money.

Thanks again for discussing the issues, there is yet another article related to bitcoin I found interesting: On the Origins of Bitcoin: Stages of Monetary Evolution - if you did not read it yet, it can bring another look at the (not so long) history of bitcoin. Ladislav Mecir (talk) 10:05, 25 October 2014 (UTC)

Thanks, I have saved the link and will check this article when I have time to read it. And you may want to watch the video that started this discussion: How Bitcoin Works Putting aside your problems with one sentence at the beginning of the video, it is a very good video for explaining how Bitcoin network works. SyaWgnignahCehT (talk) 21:40, 25 October 2014 (UTC)

Fair enough, watching the video now and listing problematic claims:

• "A copy of this file is maintained on every computer on the bitcoin network" - oversimplified; so-called "thin clients" do not contain a copy of the ledger
• "the numbers have value just because we believe they have value" - Tries to make value a matter of some vulgar religion. The correct statement is: "the value [of a thing] is determined by the importance an acting individual places on [the thing] for the achievement of their desired ends". For me, the formulations are not interchangeable.
• "public keys are actually the send-to addresses in bitcoin" - oversimplified, in fact, addresses are hashes of public keys
• the video calls "double-spend attack" something that should be called "race attack", "Finney attack", or "history modification attack" - see the distinction in the bitcoin article
• the 51% attack is not correctly explained in the video

in general, the video is pretty good, but one should not rely exclusively on it. Ladislav Mecir (talk) 23:34, 25 October 2014 (UTC)