It's obvious that most of you aren't Americans. We don't have a parliamentary system, so there is no "government" separate from the state. In common parlance, "government" means everything from the courts to the fire department to the DMV. Though, technically, the courts are supposed to be independent of the government.
And the US isn't actually a government or a state anyways, it's a trade federation. So it's really more like the opposite of a government. It's an accelerant.
It's all complicated by the fact that elected officials basically just do whatever the hell they want with no regard for anything.
Topic: Bitcoin Failure is likely - page 6. (Read 21654 times)
The Supreme Court is a branch of government. Are you saying that the Federal Reserve Bank is a branch of government?
I'd say they're a branch of the state. Normally the work "government" is reserved to the executive branch of the state. The central bank, as the supreme court, is independent from government, yet part of the state.
Don't they call it(supreme court) part of the Judicial Branch??? As in the 3 branches of government. Executive, legislative and Judicial?
I see your point though.
The Supreme Court is a branch of government. Are you saying that the Federal Reserve Bank is a branch of government?
I'd say they're a branch of the state. Normally the work "government" is reserved to the executive branch of the state. The central bank, as the supreme court, is independent from government, yet part of the state.
And please lets stop with this inernet meme that the Federal Reserve is a private bank. Its not.
I know, that annoys me too. The profits are private. The losses are public.
Man I laughed hard, I think Hugolp settled it.
And please lets stop with this inernet meme that the Federal Reserve is a private bank. Its not.
I know, that annoys me too. The profits are private. The losses are public.
But I think it is important to discuss, at least. Because half of Americans are usually fairly horrified to learn that the government doesn't actually control the money supply. And the other half are horrified to learn that private banks have been granted all of these governmental powers.
Reviewing the discussion so far it seems that I’m trying to say this;
Premise: An object can only be an used as a currency, iff it has an ‘non-infinite’1 supply2.
Any fiat through-out history has followed these rules, and when it deviates from these rules it fails,i.e debasing.
I think that it needs to be proven that either this premise is untrue, or crypto-currencies will have a ‘non-infinite’ supply.
I assume your talking about local currencies? They are always backed by something either goods and services, precious metal, or a monopolized currency. Monopolizing a non-backed currency is essential to preserve the ‘non-infinite’ supply property. When a private fiat is backed, this puts an indirect constraint on the supply of the fiat, if more fiat is created then can be backed then this violates the premise outlined above and the object no longer functions as a currency, aka debasing.
Mints used precious metal or notes were backed by goods and services, that is what constrains supply.
This issue regarding the implementation of the monetary system, i.e transparency/accountability. Unless you can prove that current monetary systems can never be transparent/accountable, then imo this represents an ideological view.
That's a good point. This puts additional constraints on the crypto-currency assuming there is a conspiracy by the powerful to prevent a transfer of wealth, that the backing organisation will also need to be distributed in some way..........
Hypothetical: Lets assume that it is not possible to debase fiat, lets assume that anyone can create a fiat. I would think that it is still possible to debase the currency system by creating successive fiats.
Total fiat in circulation = Summation of all base fiats -> which will approach infinity as there is no upper-bound on the number of base fiats. This is the world bit-coin lives in. There needs to either (be a proof that there is an upper-bound on the number of base fiats or rate of creation of base fiats) or bit-coin doesn’t live in this world or the premise is false.
1. Non-infinite does not have to mean finite imo, simply that there is some reasonable constraint on supply.
2.Object then needs to be considered useful, i.e size, weight; you can’t use water, but if weight and size wern’t an issue you could.
Premise: An object can only be an used as a currency, iff it has an ‘non-infinite’1 supply2.
Any fiat through-out history has followed these rules, and when it deviates from these rules it fails,i.e debasing.
I think that it needs to be proven that either this premise is untrue, or crypto-currencies will have a ‘non-infinite’ supply.
Quote from: hugolp
No. Money always appears naturally and it is later that governments monpolize it. Study your history.
I assume your talking about local currencies? They are always backed by something either goods and services, precious metal, or a monopolized currency. Monopolizing a non-backed currency is essential to preserve the ‘non-infinite’ supply property. When a private fiat is backed, this puts an indirect constraint on the supply of the fiat, if more fiat is created then can be backed then this violates the premise outlined above and the object no longer functions as a currency, aka debasing.
Quote from: hugolp
Most of them. During the middle ages there were numerous private mints for example.
Governements did not chose gold and silver as money, they just monopolized their use with regulations once they were widely used as money by the people.
Governements did not chose gold and silver as money, they just monopolized their use with regulations once they were widely used as money by the people.
Mints used precious metal or notes were backed by goods and services, that is what constrains supply.
Quote from: hugolp
If you study history ALL governments have debased the currency
This issue regarding the implementation of the monetary system, i.e transparency/accountability. Unless you can prove that current monetary systems can never be transparent/accountable, then imo this represents an ideological view.
Quote from: hugolp
And if you have a currency not backed by the government but a centrallized organization backing it you have high probability of being regulated or even banned by the government to stop you from competing with their currency.
That's a good point. This puts additional constraints on the crypto-currency assuming there is a conspiracy by the powerful to prevent a transfer of wealth, that the backing organisation will also need to be distributed in some way..........
Hypothetical: Lets assume that it is not possible to debase fiat, lets assume that anyone can create a fiat. I would think that it is still possible to debase the currency system by creating successive fiats.
Total fiat in circulation = Summation of all base fiats -> which will approach infinity as there is no upper-bound on the number of base fiats. This is the world bit-coin lives in. There needs to either (be a proof that there is an upper-bound on the number of base fiats or rate of creation of base fiats) or bit-coin doesn’t live in this world or the premise is false.
1. Non-infinite does not have to mean finite imo, simply that there is some reasonable constraint on supply.
2.Object then needs to be considered useful, i.e size, weight; you can’t use water, but if weight and size wern’t an issue you could.
Quote from: hugolp
Its quite irrelevant that the central bank is government owned or private..........
Like hugolp said it is irrelevant(unless proven otherwise) to this discussion. It would be appreciated that a discussion on "What level of accountability and transparency is needed for a private institution to become public" or w/e be held in a different thread. I'm sure it would be an interesting thread.
Fed. Res. has shareholders who are the big money center banks. It is more like a cartel of private banking interests that have a patina of govt. respectability given to them with these "oversight" BS.
Can you ever imagine a Fed. Res. chairman being appointed that was on the side of the people and not the banks owners
It's a private banking cartel, get over it.
It's real simple folks. Bitcoin and fiat will continue to coexist. Bitcoin will rise as fiat falls. Business and government will continue to accept fiat. All we need is the technology to convert on the fly like you have with off-shore debit cards that convert and draw off foreign currency holdings, etc. Think of it as adding "backward-compatibility with fiat" to bitcoin the leading cryptocurrency of the future.
Wikipedia says:
Quote
According to the Board of Governors, the Federal Reserve is independent within government in that "its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government." However, its authority is derived from the U.S. Congress and is subject to congressional oversight.
The Federal Reserve Bank is not answerable to the President or even the Secretary of the Treasury. It is not accountable, there are no effective governmental controls on the Federal Reserve Bank.
The same is true for the Supreme Court and yet nobody says it's private.
I agree with hugo, it's misleading to say a central bank is a private institution. It is a state institution.
And please lets stop with this inernet meme that the Federal Reserve is a private bank. Its not.
And most of the central banks of the world are not private, like f.e. the European Central Bank. And even in the few cases where the central bank is private, it only gets the power because of the government charter.
Its quite irrelevant that the central bank is government owned or private, the problem is that a central bank exists.
And most of the central banks of the world are not private, like f.e. the European Central Bank. And even in the few cases where the central bank is private, it only gets the power because of the government charter.
Its quite irrelevant that the central bank is government owned or private, the problem is that a central bank exists.
By the same logic all corporations are public since they only get the privilege of organizing as a corporation because of a government charter... Nonsense.
It is relevant because of public accountability, which the Federal Reserve Bank is not. There is no parallel between the public accountability of the Federal Reserve Bank and any public institution. It is controlled and therefore owned by private individuals who are not elected by the public to any public office, the U.S. government has a minority representation on its board and does not control it, therefore does not own it.
Its not the same. The part that takes the decissions inside the Federal Reserve System are agencies of the federal government. Bernanke and the rest of the gang are nominated by the president and ratified by congress. How is that a private institution? How is a corporation any similar? Yes corporations get privileges from the government but they dont have a federal government agency as ruling institution...
And please lets stop with this inernet meme that the Federal Reserve is a private bank. Its not.
And most of the central banks of the world are not private, like f.e. the European Central Bank. And even in the few cases where the central bank is private, it only gets the power because of the government charter.
Its quite irrelevant that the central bank is government owned or private, the problem is that a central bank exists.
And most of the central banks of the world are not private, like f.e. the European Central Bank. And even in the few cases where the central bank is private, it only gets the power because of the government charter.
Its quite irrelevant that the central bank is government owned or private, the problem is that a central bank exists.
Quote from: hupolp
You are defining what a currency is: an object that by mutual agreement everybody starts using as means of exchange. It is only later that governments come and create a monopoly.
By governments you/I mean enforcing entity. And historically it has been the enforcing entity that existed first, then the currency. Today's currency systems, there is no need for a mutual agreement at the point of transaction, the exchange of fiat will be recognized by the state. The mutual agreement manifests itself when citizens vote and their faith in the state, that their politicians will make sure that the monetary authorities adhere the rules outlined and preserve the value of fiat, this I believe is the fundamental issue is the failure of adherence, of-course it has wider implications for other aspects of society.No. Money always appears naturally and it is later that governments monpolize it. Study your history.
Quote
Quote from: hugolp
Its quite sad that you think that only through government can things work, when reality shows us that its the other way around.
Which currency system are you refering to? I am unaware of any currency system throughout history that has existed without a 'physical authority/backing'Most of them. During the middle ages there were numerous private mints for example.
Governements did not chose gold and silver as money, they just monopolized their use with regulations once they were widely used as money by the people.
Quote
Quote from: hugolp
Imagine the situation in one or two years, where more and more business are starting to accept bitcoins. Now another group starts a new chain, and then another one, so we have three e-currencies. The problem for the two new ones is that nobody is accepting them, the companies only accept bitcoins. It would be difficult for the new currencies to be accepted by the business because no one uses them, and no one uses them because no business use them. So people will continue to use the original bitcoins and not the other currencies.
Like you say let's imagine;
that current entities of power will just allow a simple transfer of power to bitcoin holders
that no one will start another crypto-currency, that is potentially recognized and backed by a physical entity
that current states will adjust their currency systems to incorporate features of bitcoin, thereby providing physical backing on top.
So?
The whole point of bitcoin is that is not government backed. That is the reason most of us trust it. If you study history ALL governments have debased the currency. For some it has taken longer, for others shorter, but ALL have debased the currency. So if you trust the government currency you are up for a surprise. Because Bitcoin is not a government system I trust it. If the government issued a bitcoin similar system I would not trust it.
And if you have a currency not backed by the government but a centrallized organization backing it you have high probability of being regulated or even banned by the government to stop you from competing with their currency. Check the recent Liberty dollars case.
What you dont seem to like of bitcoin is the exact reason why I like it.
Quote from: chodpaba
The rules by which our money operates are set by privately owned central banks.
right.............. didn’t know they were privately owned.........
The are, in fact, private banks operating under a government charter. So, by definition, they are privately owned. The idea that they are owned by the public in any context is false.
Quote from: chodpaba
That would be dandy, but I expect you would receive considerable opposition from established interests (including powerful figures) who are not interested in having their business models subverted.
They have more to lose allowing bitcoin on it’s current path, than allow it to be implemented alongside current monetary systems.Quote from: chodpaba
The rules by which our money operates are set by privately owned central banks.
right.............. didn’t know they were privately owned.........
Quote from: chodpaba
where the State has only a minority representation on it's boards
intended to spread power over more entities, i.e the state should not set monetary policy as there is to much power in one entity, ofcourse the groups that fill this void should in some way represent the interests of the community as a whole rather than the perceived current arrangement of representing a minority. This is a problem related to implementation, rather than the design of the system itself.
Quote from: chodpaba
you conflate 'currency systems' with monetary systems
Thankyou for highlighting this, I should have been using the term monetary systems in my responses.
Quote from: chodpaba
You have that backwards. If only one Bitcoin could exist in the universe it would be less safe than if there were several different versions...
This is 'Risk-Diversity 101'.
This is 'Risk-Diversity 101'.
Why is this relevant, has does this apply to bitcoin/crypto-currencies? You imply that it is reasonable to assume that bitcoin will fail and that other crypto-currencies will exist, so which do you want, infinite crypto-currency or one sole crypto-currency? If bitcoin was the sole crypto-currency it would be a finite resource with a set of very interesting and useful properties, most importantly, the control/power over the resource is distributed.
Quote from: chodpaba
Well then, write a letter to Congress and get them to start their own freaking block chain...
It is likely that current authorities will adopt attributes of bitcoin in one form or another given bitcoin removes the mint and current transaction processing system, they also have strong motives like preserving current wealth of powerful figures.
Quote from: hupolp
You are defining what a currency is: an object that by mutual agreement everybody starts using as means of exchange. It is only later that governments come and create a monopoly.
By governments you/I mean enforcing entity. And historically it has been the enforcing entity that existed first, then the currency. Today's currency systems, there is no need for a mutual agreement at the point of transaction, the exchange of fiat will be recognized by the state. The mutual agreement manifests itself when citizens vote and their faith in the state, that their politicians will make sure that the monetary authorities adhere the rules outlined and preserve the value of fiat, this I believe is the fundamental issue is the failure of adherence, of-course it has wider implications for other aspects of society.Quote from: hugolp
Its quite sad that you think that only through government can things work, when reality shows us that its the other way around.
Which currency system are you refering to? I am unaware of any currency system throughout history that has existed without a 'physical authority/backing'Quote from: hugolp
Imagine the situation in one or two years, where more and more business are starting to accept bitcoins. Now another group starts a new chain, and then another one, so we have three e-currencies. The problem for the two new ones is that nobody is accepting them, the companies only accept bitcoins. It would be difficult for the new currencies to be accepted by the business because no one uses them, and no one uses them because no business use them. So people will continue to use the original bitcoins and not the other currencies.
Like you say let's imagine;
that current entities of power will just allow a simple transfer of power to bitcoin holders
that no one will start another crypto-currency, that is potentially recognized and backed by a physical entity
that current states will adjust their currency systems to incorporate features of bitcoin, thereby providing physical backing on top.
Quote from: benjamindees
Do you just mean that fiat currencies are backed by a government that will enforce contracts based on them? If so, I think that is a somewhat weak assertion. Courts in the US are generally recognized as worthless for settling contract disputes, and are only used as a last resort when large sums are at stake. Private enforcement (ie the mob) and third-party transaction insurance (eg paypal) are arguably better models.
Yes, I mean physical enforcement. A system of control/belief that users will adhere to and implement, it really doesn't matter what form it takes as long as it has properties I've outlined prior.Quote from: benjamindees
Or do you mean to argue the absolute extreme case -- that any viable currency must enjoy absolute monopoly as a store of current value, and this monopoly must be maintained by force?
Yes, something along these lines. Lets say only one bitcoin system could exist in the universe, then probability of bitcoin working would increase, although whoever has control of the most cpu power may control the system(this maybe a weak assertion as I'm not up with the inner workings of bitcoin). Gold for example has a small pre-determined supply, hence why it is used as backing. Quote from: benjamindees
Are you arguing that high taxes are good for an economy?
No thats not what I'm arguing although I'm Aussie and I would say yes, based on outcomes achieved in Scandinavia, thats an entirely different discussion 
.I think also that if people are going to assume that bitcoin will work, then naturally you will be competing against other current currency systems. So the expectation is that bitcoin will replace a significant proportion of modern day currency. By extension there will be a massive shift in global power, and no one seems to think that is going to be issue; given that I believe that it will be relatively simple to start a new crypto-currency. This doesn't even take into account an enforcing entity.
This whole idea of "early adopters" is nonsense. I'm annoyed* at the "early adopters" who managed to accumulate huge quantities of bitcoins while CPU mining was "easy".
They don't annoy anyone until they decide to cash in, and flood the market with their "savings", which causes "WTF" results for everybody else.
If only 5% of the BTC in existence are circulating, and the early adopters decide to cash in 5% of their "savings", what happens to the Bitcoin economy? Exactly the same thing as if money printing was used to double the circulation overnight. The price halves, and they have basically confiscated 50% of the entire Bitcoin economy.
If 95% of the BTC in existence are sleeping in the hands of someone waiting to "get rich", this can be done several times. When done, they'll have confiscated, oh, about 95% of the Bitcoin economy. That is exactly how they "get rich" - by confiscating the wealth of others. Riches don't come out of thin air.
You really think someone has 95% of the bitcoins in existance? But lets assume it for the sake of the argument, what would he/she gain from crashing the value of bitcoins?
This whole idea of "early adopters" is nonsense. I'm annoyed* at the "early adopters" who managed to accumulate huge quantities of bitcoins while CPU mining was "easy".
They don't annoy anyone until they decide to cash in, and flood the market with their "savings", which causes "WTF" results for everybody else.
If only 5% of the BTC in existence are circulating, and the early adopters decide to cash in 5% of their "savings", what happens to the Bitcoin economy? Exactly the same thing as if money printing was used to double the circulation overnight. The price halves, and they have basically confiscated 50% of the entire Bitcoin economy.
If 95% of the BTC in existence are sleeping in the hands of someone waiting to "get rich", this can be done several times. When done, they'll have confiscated, oh, about 95% of the Bitcoin economy. That is exactly how they "get rich" - by confiscating the wealth of others. Riches don't come out of thin air.
One might ask, what's the point in leaving a fiat currency that unjustly enriches bankers, only to go to another that unjustly enriches its founders and early adopters, ponzi style, at the expense of those adopting the currency? There is no such thing as "something for nothing"... the massive profits "earned" in speculating BTC come at the expense of those adopting it, just as those at the top of a pyramid scheme profit not out of thin air, but at the expense of those at the bottom.
Most of us here are those "early adopters"... of course we don't "want" the opportunity to be unjustly enriched to be taken from us.
Most of us here are those "early adopters"... of course we don't "want" the opportunity to be unjustly enriched to be taken from us.
Concerning the "Ponzi" notion, Bitcoin only resembles a Ponzi scheme so long as it is primarily thought of as a vehicle for investment - i.e. so long as the only thing you can buy with Bitcoin is other currencies. If Bitcoin becomes well-known for its convenience rather than of its appreciation, and becomes widely used in day-to-day transactions, any resemblance to a Ponzi scheme will vanish in a puff of smoke. Early adopters may still profit, but not at the expense of later adopters.
Even if Bitcoin continued to be used primarily for investment, that doesn't imply unsustainability. Nobody calls gold a Ponzi scheme. The biggest difference between Bitcoin and gold, as I see it, is that the "total gold over time" chart is at a much further stage than the "total Bitcoin over time" chart - thus, it has gotten to a point where the deflation of gold can't be depended upon by those who invest in it. Inevitably this lies ahead for Bitcoin too, and it's not like it would be a bad thing.
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