Topic: Negative Interest Rates and Cryptocurrencies - page 2. (Read 1652 times)

The banks will pass the costs on to customers through account 'fees'.

I thought the negative interest rate was just for central bank loans?  I hadn't heard banks would charge consumers negative interest on savings.

Stay calm and hash on, my friend!

Technically, you're being charged to save already if the rate of interest you earn on your savings is less than the rate of inflation.  No one seems to care, though, for some reason.  Perhaps negative interest rates will trigger some sort of psychological barrier, people might actually take notice and it'll be different then, but I doubt it somehow.  It's surprising how much people are prepared to tolerate if you push gently, little by little, piece by piece.  Theft by subtlety works wonders, it seems.

I don't think you realize it, but Bitcoin will still be there. Even if that ban it, people can STILL use it. Wow, really, Acs? Yup. Because Bitcoin is digital. It's it own growing blockchain. No one controls that. No one controls what address you use. What harm could 'banning' it do?

Nada.
Nothing.
No hables es Engles, amigos.

You act like every Bitcoiner would hop to the Government, when EVERYDAY someone is bashing theirs. Yup, they gonna jump straight into their hands, huh?

To play devil's advocate on Gresham's law, I see potential reasons this would fail:

1) It's assumed there needs to be a switch from cash to NewStrongCryptoDollars. That's not the case. The dollar would remain the dollar (in the sense it's still a dollar in your online bank account). Your checking, savings accounts would still be your checking or savings accounts. The paper dollar would be the change - it would no longer have value more than it's inherent worth as an artifact. The only difference would be the birth of the new crypto. I could see this happening "before" they make dollar bills worthless.

2) This law assumes a free-market. I'm pretty sure we're entering a period where freedom is being condensed.

3) This assumes people understand what's going on around them. Cryptocurrencies, why it matters, etc.

4) It's also assuming that the entire world economy would never do this in unison. I'm not so sure about that one either. At the very least, I think the ECB, BOJ, BOE and Fed have been very much on the same page.


On the other part, I'm not saying Bitcoin or it's Gov't-like crypto would preclude cash. It doesn't have to at all. My fear really has to do with cash itself. I think some don't see why cash has value in and of itself (at this time period in history) and I'm trying to spell out why it does. Bitcoin and cash living together is 100% good by me. I just don't think it's wise for us to support the destruction of cash in totality.

It's certainly a conspiracy theory, but I'm kinda hinting that this (negative interest rates) could have been the plan from central banks from the get-go. Bitcoin was created right around the Great Recession by umm... we don't know (kinda odd). It would be pretty genius if the central banks developed a method to grow acceptance of cryptocurrency outside government, do away with cash in order of "progress", only to later begin negative interest rate policy worldwide and begin the painful develeraging that will eventually need to occur.

This is certainly fear... no doubt. It probably won't happen. But, I'm just worried about it and I think the fear is kinda justified.  

if the government made their own altcoin, go ahead let them... let them tax the altcoin, in the grand scheme of things it makes no difference bitcoin is bitcoin and an altcoin/FIAT is an altcoin/FIAT

by moving away from bank notes makes bitcoin more accessible and the general public will begin to understand crypto-currencies better. they can then choose to stick with the government controlled coin or the freedom of international, uncontrolled bitcoin.


if the government done a negative interest rate on a altcoin then it will be the exact same as freicoin, (worth researching)


there is no single point/ center / origin where governments can prevent the use of bitcoin. even if they tried to just make it illegal to use bitcoins, it will just be like the alcohol prohibition era and the current drug laws... people still buy it and get wasted each day...


yea your broad stroking alot of things and moving into sci-fi apocalypse story lines. i prefer to read documentaries.. which this topic will never be. in 50 years this would be on the fantasy channel, not the history channel.

summary:
governments can make their own freicoin copies and have negative interest rates to force consumers to spend instead of save. governments can get rid of bank notes.. but nothing governments can do would every totally destroy bitcoin.

It looks like you go wrong when you describe a scenario where governments do away with cash, institute their own crypto, and make Bitcoin et al extinct.

For the same reason that (some) people choose Bitcoin over Dollars right now, nobody would choose NewStrongCryptoDollars over Bitcoin, especially if there's an expectation for governments to abuse controlling it the way you describe. Check out Gresham's Law. http://en.wikipedia.org/wiki/Gresham's_law

Another thing to think about is that Bitcoin as the core of a monetary system does not preclude the existence of "cash". Are you familiar with Casascius coins? Also, keep in mind that at the core of the US dollar system is just a bunch of computers run by the Federal Reserve keeping an account of who owns how many dollars. Certain dollar liability accounts, associated with the Treasury Department, are matched up with physical notes ("cash"). Aside from the decentralized aspect, that's exactly how it works/could work with Bitcoin, except that instead of the Treasury Department, it would just be a trusted institution producing and circulating the notes.

Let me start by saying I'm a big supporter of Bitcoin. I like everything about it. I love the technology, how it's an alternative to fiat, etc. However, as a supporter, I've grown more and more dubious of its founding.

Even more recently, I've started to see more reason to fear how governments could use this technology in ways currently unforeseen. For example, let's just say governments convince the public of Bitcoin's merits as a replacement for cash, and decide to do away with cash. Let's say they institute their own crypto. The Fed, governments and the public moved towards a system similar to Bitcoin for cash-like exchanges. Maybe we even kept our non-cash, bank-related transactions as they are - digital. What becomes extinct under this scenario? Non-gov't sanctioned cryptos and cash.

To me this presents a very large problem and the problem is in regards to interest rates. As you may know, the ECB recently announced a negative interest rate policy. To many this seems straight-up confusing. So, you're charging people to save? Basically, yes.

The one defense against this is - cash. What do I mean? Well, cash can be put in your pocket or under your mattress and in a sense save your money (because the alternative is you losing money by putting it in a bank). You can't do this with digital cash stored in a bank under this scenario. Of course, one could argue that independent cryptocurrencies (as they currently are) would also be protection. But, I think my issue with that is, governments at large could ban them. Yes, whether we want to admit this or not, this is possible.

So, for example, the US gov't (and gov'ts like it) could create their own crypto, ban all "free" cryptos", do away with cash and institute negative interest rates - sucking out all monetary wealth to pay for it's ever-growing debt.

I'm probably reading too much into this, but this scares the crap out of me... please calm me down...