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I think you answered your own question with the obv answer - most financial markets are regulated.

We can argue that the market price of something is already reflective this risk from regulation (or lack thereof) but that would require everyone in the market to be perfectly informed.

As this person said, there is plenty misinformation being spread by rational actors who stand to benefit from Bitcoin price manipulation. In other financial markets there are at least some restrictions on this type of behavior, like insider trading, etc.




What "regulation" would prevent Bitcoin's volatility? The fact of the matter is that most of Bitcoin's value is speculative, and therefore extremely volatile, and it will be that way until large numbers of things can be bought at static Bitcoin prices (not converted Bitcoin at the current BTC/USD exchange rate). Tying assets to tangible value is the only way to add price hysteresis to any fiat instrument, including fiat currencies like US dollars. If there weren't millions of things you could buy for a fixed price in USD, you had better believe it would show the same volatility.

People like to throw around the talking point that "markets need to be regulated", but the analysis stops there. Don't be so quick to regulate without an idea of why/if it's necessary, or what the true effects of the regulation would be. A regulation should be a response to a well-defined problem (defined as an encroachment of someone's liberty, whether specific or the public at large) with a known cause, such that the regulation maximizes overall freedom. At least, in a fair system.


Regulating the supply so that it's not a deflationary currency would solve some of Bitcoin's volatility issues.

You can counter by saying, "It's not designed that way" but Bitcoin is designed to accept whatever forks a concensus of miners accept, so it is possible.


> Regulating the supply so that it's not a deflationary currency would solve some of Bitcoin's volatility issues.

Please elaborate/provide evidence. I have never heard of such a link or economic property that would demonstrate that volatility is impacted by the sign of the inflation rate.

And of course, miners already influence the money supply by choosing to sell or hold their supply, so they act as a decentralized form of the ECB/Fed/etc. Their less influential 'monetary policy' is probably much less harmful as well.

And it's important to understand what deflation is -- Bitcoin only appreciates when people assign more value to it. All things being equal, Bitcoin is NOT deflationary, whereas the USD is inflationary, because even with 100% adoption the USD supply is artificially increased, and the value eroded.


>I have never heard of such a link or economic property that would demonstrate that volatility is impacted by the sign of the inflation rate.

Then you must have been asleep during economics class when they covered the great depression.

Most modern currencies are inflationary and have taken steps to remove deflationary properties like the gold standard, because it exasperates volatility and economic bubbles. It promotes hoarding, which decreases liquidity and increases volatility.

It's exactly why quantitative easing is used to increase supply of money in order to maintain a specific range on inflation.


> Then you must have been asleep during economics class when they covered the great depression.

Personal attacks are no substitute for content and explanation; I'm trying to help you by giving a chance to better expound your original point.

For your own understanding, I would recommend reading the Monetarist explanation of the Great Depression: https://fee.org/articles/money-in-the-1920s-and-1930s/. There is also the Austrian Economics approach which is built around the fact that inflation was promoted to keep commodity values constant -- in reality, I think both Monetarist and Austrian economic factors played a role.

Most likely, I would guess the issue is that you don't understand the definition of volatility: https://en.wikipedia.org/wiki/Volatility_(finance)#Mathemati...

Please review these materials and explain how price volatility is related to the sign of inflation, or whether you meant something else. My assumption is that it is not, and I have seen no evidence to suggest otherwise. You can look at the most volatile years of US exchange rates and they were during the Jimmy Carter "stagflationary" era. You may be conflating volatility of a currency with volatility of other measures in an economy.


sure, there is some regulation (definitely more than in the btc world), but even that doesn't prevent things like the goldman sachs deal back in 2008 from happening. the point I'm trying to make - financial markets in general are volatile and largely unpredictable with plenty of fud and disinformation floating around, not that different from the "bitcoin world".


I'm not saying regulation is working exceedingly well, just that some regulation is still better than none.


The sheer unpredictability of Bitcoin even bites those who try to use price manipulation to their advantage though at times.

Look at what happened with pirateat40, the "bitcoin savings and trust" ponzi scheme king who couldn't pay out one time and decided to try to try his hand at market manipulation instead.




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