the effects of fractional reserve on bitcoins value

NewLiberty

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Gresham's Lawyer

Quote from: Jumpy on October 26, 2013, 10:19:45 PM

Sure, the market would be giving a bit on price, but the upside is pretty enormous.

In my opinion, the key would be to insure the deposits in a nominal amount of fiat. For example, the insuring entity (whether a company or the government) will insure deposits of BTC up to 70 USD/BTC. This number would have to be revisable periodically to keep it below the actual value of Bitcoin, but it would serve to give people a safer place to put their bitcoins to keep up with inflation via interest. It would also solve a lot of issues with capitalizing projects via bitcoin (buh-bye BTCJam).

Alas, this is only my wet dream. It's unlikely to happen in an acceptably regulated fashion.

I think I'll write a blog on this tonight. Share your ideas to help me.

I do this now, but with silver instead of dollars. You can get no less than 4 oz silver bitcoin specie for each bitcoin (and currently a good bit more than that). The QR code on the pieces creates a flexible market based bimetallic standard (gold standard / silver standard - but only silver is released so far), with a floor value of the nominal value (1 ozt silver / quarter bitcoin).

I would never be so bold as to guarantee a level of fiat currency against bitcoin (I'm not the central bank), but I certainly would with a commodity monetary form. It is looking like the 2014 one ounce silver will be a bit-dime if things move forward as they appear to be which would put the floor value of bitcoin at 10 ounces silver .999 fine for the bitcoin specie.

mirelo

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Quote from: crumbs on October 30, 2013, 10:14:16 PM

All the bankers of the world are criminals.
The governments, they're in on it -- all the governments of the world are criminals.
The people who use money and thus banks -- all are criminals, as much as the fence who buys stolen goods is a criminal.

I know i have to call someone to put an end to the crimez, but who to call???

This whole system is based on the fundamental mistake between money itself (its value) and its representation (gold, silver, bank accounts, bank notes, etc). The bankers merely took advantage of it: they didn't create it. The solution is to start using money that distinguishes itself as a monetary value from its own representation, which is precisely what Bitcoin does, by representing its monetary value as a private key then metarepresenting it as a public key.

Lohoris

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Bitgoblin

Quote from: User705 on October 31, 2013, 01:13:21 AM

Call ghostbusters.

You win the Internet today.

User705

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First 100% Liquid Stablecoin Backed by Gold

Call ghostbusters.

crumbs

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Quote from: mirelo on October 30, 2013, 07:46:19 PM

Quote from: User705 on October 29, 2013, 08:43:08 PM

I agree. Private fractional reserve is just fine.

Reserves are just fine, as long as they are not merely fractional.

As for being private, when the bank loans your money to someone else, that money still belongs to you yet also starts belonging to someone else. This dilutes the value of your money so part of it - part of its monetary value - no longer belongs to you: fractional-reserve banking does not respect private property.

Thus, by legalizing fractional-reserve banking, the government becomes an accomplice of the banks. Finally, with the legalization of central banking, that complicity becomes a partnership.

All the bankers of the world are criminals.
The governments, they're in on it -- all the governments of the world are criminals.
The people who use money and thus banks -- all are criminals, as much as the fence who buys stolen goods is a criminal.

I know i have to call someone to put an end to the crimez, but who to call???

mirelo

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Activity: 242

Merit: 250

Quote from: User705 on October 29, 2013, 08:43:08 PM

I agree. Private fractional reserve is just fine.

Reserves are just fine, as long as they are not merely fractional.

As for being private, when the bank loans your money to someone else, that money still belongs to you yet also starts belonging to someone else. This dilutes the value of your money so part of it - part of its monetary value - no longer belongs to you: fractional-reserve banking does not respect private property.

Thus, by legalizing fractional-reserve banking, the government becomes an accomplice of the banks. Finally, with the legalization of central banking, that complicity becomes a partnership.

User705

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First 100% Liquid Stablecoin Backed by Gold

I agree. Private fractional reserve is just fine.

crumbs

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Quote from: User705 on October 29, 2013, 08:13:40 PM

Quote from: crumbs on October 29, 2013, 08:18:44 AM

Quote from: Zangelbert Bingledack on October 29, 2013, 06:37:06 AM

Quote from: crumbs on October 28, 2013, 04:18:28 AM

Quote from: Zangelbert Bingledack on October 28, 2013, 02:31:17 AM

Keep in mind that what allows fractional reserve is lack of competition (a company could profitably differentiate itself from competitors by maintaining transparency), and what causes lack of competition is government regulation. In a completely unregulated market, fractional reserve is a non-issue because there is no possibility of monopolistic privilege for any one company or cartel.

You're wrong. What allows fractional reserve banking is the same thing that allows almost everything else in this world -- wealth. Regulation only tries to make sure that the stealing is kept to a reasonable & sustainable level. Without regulation, scammers and parasites multiply 'til there's nothing left to steal -- see bitcoin "investment" for edifying examples.
On a sidenote: Getting rid of corrupt cops doesn't get rid of crime, it only changes the ones who get to commit it.

Notice I said government regulation. Free-market forms of regulation can and will happen, such as agencies whose job it is to monitor firms on their transarency, etc. The difference is that free-market "regulation" doesn't create monopolies, because it cannot create barriers to entry. That means no outrageous levels of fractional reserve - a non-issue.

Please understand that the government is a form of regulation created by the free market.
The government was not thrust upon mankind by aliens, it didn't instantly materialize from a Bureaucratic Big Bang -- it is the net result of people, and the free market, trying to regulate themselves. It happened to be so fabulously adaptive & successful from the evolutionary & socio-Darwinian perspectives, that it is now pandemic.
Way to go, Invisible Hand.

The free market created fractional reserve banking -- it was created when the first goldsmith/money changer realized that he could write more IOUs than he had gold in his vault. A no-brainer, really.

Fractional reserve banking predates any form of regulation, especially government.
For the wikipedos & men who love them: "Fractional-reserve banking predates the existence of governmental monetary authorities and originated many centuries ago in bankers' realization that generally not all depositors demand payment at the same time.[4]" --wikip.

Understand what it is you're against before speaking out against it, pl0x.

Murder came about a long time ago so I shouldn't be against it? Government is the desire of all to get something for nothing and should be resisted just like the desire to steal something that is also in all of us to some degree and should be resisted as well.

Does no one in this thread pay attention?
I know you hate the government. I get it. This thread is not about your government hatred or any other daddy issues.

It is about the effects of fractional reserve on the bitcoin value.

I've explained previously that fractional reserve banking doesn't need regulations or governments. You took that as a cue to start raging about government. WHICH HAS NOTHING TO DO WITH FRACTIONAL RESERVE BANKING.

There Angry

User705

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Quote from: crumbs on October 29, 2013, 08:18:44 AM

Quote from: Zangelbert Bingledack on October 29, 2013, 06:37:06 AM

Quote from: crumbs on October 28, 2013, 04:18:28 AM

Quote from: Zangelbert Bingledack on October 28, 2013, 02:31:17 AM

Keep in mind that what allows fractional reserve is lack of competition (a company could profitably differentiate itself from competitors by maintaining transparency), and what causes lack of competition is government regulation. In a completely unregulated market, fractional reserve is a non-issue because there is no possibility of monopolistic privilege for any one company or cartel.

You're wrong. What allows fractional reserve banking is the same thing that allows almost everything else in this world -- wealth. Regulation only tries to make sure that the stealing is kept to a reasonable & sustainable level. Without regulation, scammers and parasites multiply 'til there's nothing left to steal -- see bitcoin "investment" for edifying examples.
On a sidenote: Getting rid of corrupt cops doesn't get rid of crime, it only changes the ones who get to commit it.

Notice I said government regulation. Free-market forms of regulation can and will happen, such as agencies whose job it is to monitor firms on their transarency, etc. The difference is that free-market "regulation" doesn't create monopolies, because it cannot create barriers to entry. That means no outrageous levels of fractional reserve - a non-issue.

Please understand that the government is a form of regulation created by the free market.
The government was not thrust upon mankind by aliens, it didn't instantly materialize from a Bureaucratic Big Bang -- it is the net result of people, and the free market, trying to regulate themselves. It happened to be so fabulously adaptive & successful from the evolutionary & socio-Darwinian perspectives, that it is now pandemic.
Way to go, Invisible Hand.

The free market created fractional reserve banking -- it was created when the first goldsmith/money changer realized that he could write more IOUs than he had gold in his vault. A no-brainer, really.

Fractional reserve banking predates any form of regulation, especially government.
For the wikipedos & men who love them: "Fractional-reserve banking predates the existence of governmental monetary authorities and originated many centuries ago in bankers' realization that generally not all depositors demand payment at the same time.[4]" --wikip.

Understand what it is you're against before speaking out against it, pl0x.

Murder came about a long time ago so I shouldn't be against it? Governmental fractional reserve is the desire to get something for nothing and should be resisted just like the desire to steal something that is also in all of us to some degree and should be resisted as well.

crumbs

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Quote from: caveden on October 29, 2013, 06:08:19 PM

Quote from: crumbs on October 29, 2013, 04:06:57 PM

That's going by your definition of the free market, where assassinations "don't belong." They do if there's any demand and any supply.

No, they don't. It's only a free market if property rights are respected. Assassination - and governments - by definition does not respect them, so it's an antithesis to free markets. Regardless of supply and demand. Do no confuse "free markets" with just "markets" or even "economic laws" (like the fact that supply and demand determine prices). Economic laws are inexorable and thus, of course, apply to all sort human actions, including those which do not respect property rights, like assassination, slavery. theft and everything else government/mafias do.

Lol, so i can't sell my wares at your free market (i deal in assassinations Cool

)? That's pretty dictatorial of you. Seems like you're an aspiring tyrant yourself, telling me what i can and can't sell Angry

*Also look at the red text. Your definition, not everyone's. Free market economy is simply the opposite of planned economy. Ignore the wikipedos here -- that page is a pillow fight & a pissing contest (see talk).

Edit: anothersomeoneswrongontheinternet.gif Tongue

caveden

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Quote from: crumbs on October 29, 2013, 04:06:57 PM

That's going by your definition of the free market, where assassinations "don't belong." They do if there's any demand and any supply.

No, they don't. It's only a free market if property rights are respected. Assassination - and governments - by definition does not respect them, so it's an antithesis to free markets. Regardless of supply and demand. Do no confuse "free markets" with just "markets" or even "economic laws" (like the fact that supply and demand determine prices). Economic laws are inexorable and thus, of course, apply to all sort human actions, including those which do not respect property rights, like assassination, slavery. theft and everything else government/mafias do.

Quote from: crumbs on October 29, 2013, 04:06:57 PM

But that's another topic

Finally, it's a bit odd that everyone is so eager to change topics away from fractional reserve banking -- the subject of both the post you are replying to & the title of this thread.

It's just that....

Sorry for the off-topic.

crumbs

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Quote from: caveden on October 29, 2013, 03:46:24 PM

Quote from: crumbs on October 29, 2013, 08:18:44 AM

Please understand that the government is a form of regulation created by the free market.

This phrase is a self-contraction. If you don't see it that way, that's because you don't truly understand what free market means.
Hint: free market != market. The former is just a subset of the latter.
Ex: an assassination market doesn't belong in free markets.
Same thing for governments. Their coercive nature is incompatible with the premises of free markets.

No contradictions that i can see, read the quoted text again.
The free market created the suffocating government just like brewer's yeast created the alcohol which suffocated & killed it.
Always has. Always will.

That's going by your definition of the free market, where assassinations "don't belong." They do if there's any demand and any supply.
But that's another topic

Finally, it's a bit odd that everyone is so eager to change topics away from fractional reserve banking -- the subject of both the post you are replying to & the title of this thread.

caveden

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Quote from: crumbs on October 29, 2013, 08:18:44 AM

Please understand that the government is a form of regulation created by the free market.

This phrase is a self-contraction. If you don't see it that way, that's because you don't truly understand what free market means.
Hint: free market != market. The former is just a subset of the latter.
Ex: an assassination market doesn't belong in free markets.
Same thing for governments. Their coercive nature is incompatible with the premises of free markets.

crumbs

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Quote from: Mike Christ on October 29, 2013, 12:23:43 PM

Quote from: crumbs on October 29, 2013, 08:18:44 AM

Please understand that the government is a form of regulation created by the free market.
The government was not thrust upon mankind by aliens, it didn't instantly materialize from a Bureaucratic Big Bang -- it is the net result of people, and the free market, trying to regulate themselves. It happened to be so fabulously adaptive & successful from the evolutionary & socio-Darwinian perspectives, that it is now pandemic.
Way to go, Invisible Hand.

The free market created fractional reserve banking -- it was created when the first goldsmith/money changer realized that he could write more IOUs than he had gold in his vault. A no-brainer, really.

Fractional reserve banking predates any form of regulation, especially government.
For the wikipedos & men who love them: "Fractional-reserve banking predates the existence of governmental monetary authorities and originated many centuries ago in bankers' realization that generally not all depositors demand payment at the same time.[4]" --wikip.

Understand what it is you're against before speaking out against it, pl0x.

The problem is when this regulation is out of the hands of the individual, for it assumes the higher power is always going to have the individual's best interests in mind. The free market will be regulated, because it is involved with people who are capable of such feats; the difference between the libertarian market and the authoritarian market is who regulates it: you, or the people who attempt to represent you.

Understand the argument you're against before making people repeat themselves, please.

You forgot what you're replying to.
A post about fractional reserve in a thread about fractional reserve. The word "regulation" was only used to point out that it is not the cause, nor is it necessary for fractional reserve banking. I even included a wikip quote Sad

Mike Christ

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Quote from: crumbs on October 29, 2013, 08:18:44 AM

Please understand that the government is a form of regulation created by the free market.
The government was not thrust upon mankind by aliens, it didn't instantly materialize from a Bureaucratic Big Bang -- it is the net result of people, and the free market, trying to regulate themselves. It happened to be so fabulously adaptive & successful from the evolutionary & socio-Darwinian perspectives, that it is now pandemic.
Way to go, Invisible Hand.

The free market created fractional reserve banking -- it was created when the first goldsmith/money changer realized that he could write more IOUs than he had gold in his vault. A no-brainer, really.

Fractional reserve banking predates any form of regulation, especially government.
For the wikipedos & men who love them: "Fractional-reserve banking predates the existence of governmental monetary authorities and originated many centuries ago in bankers' realization that generally not all depositors demand payment at the same time.[4]" --wikip.

Understand what it is you're against before speaking out against it, pl0x.

The problem is when this regulation is out of the hands of the individual, for it assumes the higher power is always going to have the individual's best interests in mind. The free market will be regulated, because it is involved with people who are capable of such feats; the difference between the libertarian market and the authoritarian market is who regulates it: you, or the people who attempt to represent you.

Understand the argument you're against before making people repeat themselves, please.

theecoinomist

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Quote from: Jumpy on October 26, 2013, 10:19:45 PM

(buh-bye BTCJam).

but btcjam can be really profitable if you have some funds to begin with and don't throw your money at runners/scammers?

Lohoris

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Bitgoblin

Quote from: crumbs on October 29, 2013, 08:18:44 AM

Please understand that the government is a form of regulation created by the free market.
The government was not thrust upon mankind by aliens, it didn't instantly materialize from a Bureaucratic Big Bang -- it is the net result of people, and the free market, trying to regulate themselves. It happened to be so fabulously adaptive & successful from the evolutionary & socio-Darwinian perspectives, that it is now pandemic.
Way to go, Invisible Hand.

The free market created fractional reserve banking -- it was created when the first goldsmith/money changer realized that he could write more IOUs than he had gold in his vault. A no-brainer, really.

Fractional reserve banking predates any form of regulation, especially government.
For the wikipedos & men who love them: "Fractional-reserve banking predates the existence of governmental monetary authorities and originated many centuries ago in bankers' realization that generally not all depositors demand payment at the same time.[4]" --wikip.

Understand what it is you're against before speaking out against it, pl0x.

This post is very well written and thought, thank you : )

crumbs

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Quote from: Zangelbert Bingledack on October 29, 2013, 06:37:06 AM

Quote from: crumbs on October 28, 2013, 04:18:28 AM

Quote from: Zangelbert Bingledack on October 28, 2013, 02:31:17 AM

Keep in mind that what allows fractional reserve is lack of competition (a company could profitably differentiate itself from competitors by maintaining transparency), and what causes lack of competition is government regulation. In a completely unregulated market, fractional reserve is a non-issue because there is no possibility of monopolistic privilege for any one company or cartel.

You're wrong. What allows fractional reserve banking is the same thing that allows almost everything else in this world -- wealth. Regulation only tries to make sure that the stealing is kept to a reasonable & sustainable level. Without regulation, scammers and parasites multiply 'til there's nothing left to steal -- see bitcoin "investment" for edifying examples.
On a sidenote: Getting rid of corrupt cops doesn't get rid of crime, it only changes the ones who get to commit it.

Notice I said government regulation. Free-market forms of regulation can and will happen, such as agencies whose job it is to monitor firms on their transarency, etc. The difference is that free-market "regulation" doesn't create monopolies, because it cannot create barriers to entry. That means no outrageous levels of fractional reserve - a non-issue.

Please understand that the government is a form of regulation created by the free market.
The government was not thrust upon mankind by aliens, it didn't instantly materialize from a Bureaucratic Big Bang -- it is the net result of people, and the free market, trying to regulate themselves. It happened to be so fabulously adaptive & successful from the evolutionary & socio-Darwinian perspectives, that it is now pandemic.
Way to go, Invisible Hand.

The free market created fractional reserve banking -- it was created when the first goldsmith/money changer realized that he could write more IOUs than he had gold in his vault. A no-brainer, really.

Fractional reserve banking predates any form of regulation, especially government.
For the wikipedos & men who love them: "Fractional-reserve banking predates the existence of governmental monetary authorities and originated many centuries ago in bankers' realization that generally not all depositors demand payment at the same time.[4]" --wikip.

Understand what it is you're against before speaking out against it, pl0x.

Zangelbert Bingledack

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Quote from: Hawker on October 28, 2013, 05:20:05 AM

Quote from: Zangelbert Bingledack on October 28, 2013, 02:31:17 AM

Keep in mind that what allows fractional reserve is lack of competition (a company could profitably differentiate itself from competitors by maintaining transparency), and what causes lack of competition is government regulation. In a completely unregulated market, fractional reserve is a non-issue because there is no possibility of monopolistic privilege for any one company or cartel.

Fractional reserve banking exists in a competitive environment and has always done so. So that premise is faulty.

Where is your data? Banking is almost always one of the most regulated industries, so I'm not sure where you'll find such a competitive environment in history (medieval Iceland??), and Bitcoin makes transparency even easier so there is even less friction there.

Note that insofar as "fractional reserve" implies fraudulent banking, I'm saying it won't happen enough to be an issue, provided the market is unhampered by government. But simply having a loan clearinghouse where peopleunderstand they're loaning their money and risking not getting it back, is fine. I wouldn't call that fractional reserve because there's no claim being made that it is a "reserve" (bank). If you want to call that fractional reserve as well, then yes there will be some fractional reserve and it will create some inflation, but that's an odd name for it.

Zangelbert Bingledack

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Quote from: crumbs on October 28, 2013, 04:18:28 AM

Quote from: Zangelbert Bingledack on October 28, 2013, 02:31:17 AM

Keep in mind that what allows fractional reserve is lack of competition (a company could profitably differentiate itself from competitors by maintaining transparency), and what causes lack of competition is government regulation. In a completely unregulated market, fractional reserve is a non-issue because there is no possibility of monopolistic privilege for any one company or cartel.

You're wrong. What allows fractional reserve banking is the same thing that allows almost everything else in this world -- wealth. Regulation only tries to make sure that the stealing is kept to a reasonable & sustainable level. Without regulation, scammers and parasites multiply 'til there's nothing left to steal -- see bitcoin "investment" for edifying examples.
On a sidenote: Getting rid of corrupt cops doesn't get rid of crime, it only changes the ones who get to commit it.

Notice I said government regulation. Free-market forms of regulation can and will happen, such as agencies whose job it is to monitor firms on their transarency, etc. The difference is that free-market "regulation" doesn't create monopolies, because it cannot create barriers to entry. That means no outrageous levels of fractional reserve - a non-issue.

Topic: the effects of fractional reserve on bitcoins value (Read 3812 times)