Topic: 2013-08-16 RT - Bitcoin never to become a global currency, nothing backs it up (Read 2713 times)

It'll go on your "permanent record"!

This takes the step toward the automation of externalizing conscience that is currently occupied by religion and law.

I don't doubt that it wouldn't have it's "defaulters", but I wouldn't like such a thing to be used only for financial purposes. I'd implement it (in part) the way the file system permissions in Unix style operating systems work: I trust Amy with my address information, Ishaq to come and browse in my shop, and the Water company to take up to $75 a quarter etc etc. And make it a kind of Diaspora style, personal server from which people can query information about you. Even if people abused the trust vested in them by others, at least we would have more information than we have right now about the kind of people we're dealing with. There are incredibly trustworthy people who, instead of getting the maximum opportunity to utilise it to the benefit of others, have it used against them instead. The trust abusers disappear off to a place where their relative trustworthiness has higher value, and their trust stock is largely undamaged. Everyone loses really, I'd argue that even the abuser does unless they're a completely remorseless psychopath (an information tool to weed those out before they go on to commit major fraud or murder? Sounds useful). And the abused feel like they can't trust anyone in general.

It just seems to me that we have the ability to create some kind of information system, based around trust itself, the world has too many people in it to have to constantly assess people for who they really are. If bad trust credentials followed you around everywhere, is that not a good motivation to always try and behave with good intentions? The difficulty I think is: what is the measure, what is a unit of trust? I have no answer to that, or at least not now. I trust some people more or less about different things, but how do you reflect that objectively?

Thanks for this.  Here's the direct link brought forward:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2248419

精彩

!!!

If you would like to help put more "backing" on bitcoin, I am backing bitcoin with silver and gold.
In an effort to put a floor on the bitcoin valuation, I am making one ounce .999 silver Quarter Bitcoin pieces as global pieces.
These are also special because the value is flexible along with the exchange rates of bitcoin and silver so that you can read the QR code on the reverse to get the current value.  (No bitcoin is stored in these.  There is no tamper-evident hologram sticker.)  They do not function as wallets, but you can redeem your bitcoin for them.  So bitcoin has backing (though truthfully, bitcoin hardly needs it except for those new to it or who want to trade in person and don't have time to wait for block verification).

Further, the QR code is bookmarked in Chinese to honor the people there who are especially brave and forward looking and have adopted bitcoin in ever growing numbers.


I am looking for folks in China that may want these and can provide them to others there, so that when I get inquiries from people in China looking to buy locally I can send them to people in country.  There is more information and discussion here:
https://bitcointalksearch.org/topic/bitcoin-specie-project-sponsored-by-the-makers-of-new-liberty-dollar-269535

LOL. RT's argument is soooooo 2010. 

actually i think the link is in this thread

https://bitcointalksearch.org/topic/study-how-imf-could-control-bitcoin-kill-it-or-join-it-link-to-paper-230982

there is a really interesting academic article in draft form that argues that the imf charter needs to be amended to give virtual currencies non-member currency status, otherwise it can be used to attack and devalue an imf member state currency with the imf having no power to counteract a rapid devaluation.  it argues not only for the inclusion of virtual currencies but also that once amended the imf can ask member states to hold some amount of virtual currency should a speculative devaluation event occur.

obviously at this stage a hypothetical but should bitcoin reach 100B$ the scenario enters into the realm of meaningful probability.

i will try to post it tomorrow when i am back at home.

I actually don't think that the "no backing problem" is typical for mainstream economists. Practically all economic schools agree that the main determinant for the choice of which money to use is liquidity, not "backing", and this has been recognised for over a century. Just individual economists, in particular who don't specialise in this area, occasionally forget about this.

It can't work long-term. The problem is force majeure. Many people are trustworthy for years but they hit problems with personal circumstances, failed business, uninsured accident, ill health, and they default. At some level, even the TBTF banks can be "trusted" until an economic crisis when they become totally untrustworthy. Think of Lehman.

Trust-free money and math-based protocols are the only solution to sound money and stable macro-economics.

I wrote a article to refute this lady yesterday.

written in Chinese
http://p2pbucks.com/?p=6644

"Backing" is not at all subjective.  It conveys a specific meaning, that a currency is redeemable for a specific quantity of a particular asset.

The US Federal Reserve Note is backed by US Federal Reserve Notes, or "Full Faith and Credit" if you prefer. (so not backed).
The only backed currencies today are non-governmental, so that is not really the point she likely intended to make anyway.

Bitcoin has a much better chance of becoming backed, than any government currency.  The closest thing to "backing" that central banks have today is an interlocking network of soverign debt.  Each of them owe the all the others in various amounts.  The BASEL II accord still holds the metrics for that, BASEL III is not yet implemented.

You mean keeping tabs on whether a person is trustworthy or not?  Like you meet someone new, and through this ledger you know if he's a decent fellow or not?

I suggested a p2p trust ledger a while ago, the idea was disliked. I still think some implementation of a system like that would be incredibly useful to a social, technological species such as us, but I don't think I'd personally be capable of coming up with anything usable. Hopefully someone will dream something up.

Agreed it's damn time we changed the economics textbooks

Trust: the most valuable commodity there is

Bogenrief's ignorance of human nature and social interaction is typical for mainstream economists, who study a pseudoscience the modern version of which was entirely created and sustained by the Central Banking Hegemony. Here's proof:

"The problem with Bitcoin is that unlike the dollar, unlike gold, unlike even land there is nothing actually backing it up other than the inherent trust in transactions between its users."

What she and the other charlatans don't realize is, "inherent trust in transactions between . . . users" is the most powerful form of trust in the world, especially when backed by mathematics/cryptography.

Bitcoin has more backing than anything ever has in the entire history of civilization.

2 Days later Germany acknowledges it
KISS MY

PS: Back to the Kitchen with you lol

It is often said that bitcoin isn't backed by anyone, when in reality bitcoin is backed by everyone who uses it and sees value in using it.

The important distinction is that bitcoin's perceptual "backing" is entirely distributed and decentralized, and ultimately far more robust than that of a currency backed by any single political entity. In this respect bitcoin is much more like gold or silver than a national currency.

While I think that gold will never disappear as a tradeable intermediary, it is pretty silly to argue that the every infrastructure system we rely on will somehow go 'away', leaving gold as king.

Things aren't that simple. In serbia and croatia, when conflict turned entire cities into shell-pocked hellholes, they were trading with cans of food, candles, sex, whatever they could use. There wasn't a miser in the main square chuckling with his gold stash as everyone demanded to trade in gold coins.

That is the biggest disconnect I see with the gold grabbers versus bitcoiners, we can complement each other, but the gold-heads just want their specie to be the 'king', and that often requires the entire world to turn into a complete flaming pile of garbage first.

It's just anchoring bias taken to an extreme.

Yeah I don't think we disagree really. My post was really based upon the perspective of an investor who cares only about keeping value as money, and doesn't care about sinking ships or the like. I think this is one of RT's main audiences in this regard.

I think the definition of "it's not backed by anything" is less important than the intended meaning which is usually along the lines of "it could become worthless" which is a red flag for investors especially fund managers, and this wouldn't be incorrect either. A lot of pro-Bitcoin folk rightly laugh at that of course, but from where I'm sat that is exactly the image of Bitcoin many investors have, and one that has been carved out by the media, along with all the black market rhetoric.

I believe we think alike, but I still don't like the word 'backing'   .
In the bread case, you seem to use the term "backing" as a synonym to "what gives this value".  Or what is your definition of "backing"?
And if we are talking about different scenario's, how much value is there in gold or guns when you are on a sinking boat in the middle of the ocean with no lifeboats?  Anything can become useless in some scenarios, so the present value you ascribe to an asset should consider the likeliness of these scenarios, and the value the asset holds in each scenario.

No need to comment. Just look at her: http://www.youtube.com/watch?v=e__YtgJSRQM
edit: I know, ad hominem. But what the hell I couldn't help myself...

The fact that you can eat it to stay alive.

It is something I often hear from gold bulls and to be honest they are right. If the internet were to go down then your bitcoin would be worthless, just as if the government decides to inflate the currency on the scale of Zimbabwe your fiat becomes worthless.

Currencies have a long history of coming and going and this is why some people especially investors are wary of anything not "backed". Because if the SHTF in any significant way (war, famine, economic collapse) there is still value in things like food, guns, medicine etc, and other investors understand this, even if they are not tin hatters themselves, and consider it when making investment decisions. This affects prices. There are still several generations that only understand technology enough to a) send email, b) check facebook and c) watch porn and unfortunately those are the generations with the money, for now.


The best answer to a statement like this that I heard was "You give your girlfriend copper rings and I'll give mine gold rings and we'll see who keeps them longer." - Mark Faber

The world's default currency for thousands of years, gold, is backed by nothing. 

When I was new here I earnestly replied to one of the "what backs it up" threads, making a ponderous claim about the work of the miners blah blah. That drew a Libertarian dogma reply - they threw the book at me, as I recall, not realizing that I already knew all that stuff and was fairly sympathetic to it. The experience led me to a conclusion similar to what you express - "backing" is one of those terms that people like to argue dogmatically about. Meh.

Soon someone will earnestly quote "full faith and credit". Woot!

Is the math behind Clonecoin 42 any less valid?

Depends on how deep you read into it.

That's a nice sound bite, but not much more.

Backed by:

a monopoly on violence v.s. encrypted peer-to-peer computer network


That's the current dichotomy in the "civilized" world

Bitcoin is backed up by Math ^^

I really don't get this whole fixation on "what backs it up?".
What backs up the bread on your plate?
Imho, "backing" is a very subjective and vague term, that subtracts from talking about the properties things have.
People apparently need to hear "this money is backed by X", and then they can consider it to be safe.  Yah sorry, it's not that simple.

The wall, perhaps. They will fight in many ways. Propaganda doesn't have to be true to be effective.

After all, she has an implicit point. All of "their" currencies are backed by people with guns and BTC is not.

(Or maybe the classroom)

The ONLY thing that matters is the value society places on an asset relative to all other assets at any given point in time.  

I feel sad for her.

It's better to be backed by nothing than backed by silly Financial Advisors 

 

she's not a smart cookie - i wouldn't want her managing or advising me on anything

bitcoins are the "confederate currency" right.... at least she didn't say something stupid ala tulips

Proof of the "Peter Principle",  that you can be promoted to a level of incompetence. Margaret Bogenrief advising on finance when, clearly, she should be advised on matters of finance.

http://rt.com/op-edge/bitcoin-global-currency-economy-579/