What if Gov puts the Dollar and Bitcoin on the Silver Standard, 1 to 1?

theecoinomist

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Quote from: BADecker on November 13, 2013, 10:52:16 PM

Quote from: grue on November 13, 2013, 10:34:28 PM

The only reason people traded their gold/silver for bills was because metals were hard to safeguard and inconvenient for trade. this is not true with bitcoin. Therefore no one would trade their bitcoins for "bitcoin bills" issued by the US government, except in very small amounts for convenience purposes (microtransactions, physical payments, etc)

Not "bitcoin bills." Rather, simply anyone could go to the bank and exchange their dollar or their bitcoin for, say, an ounce of silver. The point would be to place Bitcoin on an equal footing with the Dollar.

Of course, nobody would go to the bank and get an ounce of silver at today's bitcoin prices. But everyone would become a bit leery about obtaining more bitcoins for investment purposes when the bank was saying that they were willing to give them only the same amount of silver for a bitcoin as for a dollar. They wouldn't know for sure what other folks were doing. So, they would be a little slower to buy or trade for bitcoins.

Wouldn't this start to bring the dollar back up with relation to bitcoin?

No, only idiots would sell their coins for those reasons you mentioned. Also while some people might be that stupid in the US, the majority of volume is in Asia..
Also, it would make it too much of a hassle for helicopter Ben if the dollar was based on actual metals..

Coinseeker

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The other issue with this plan is well explained by Erik Voorhees. If Bitcoin is backed by silver or gold or anything for that matter, it ceases to be free from counter-party risk. Because backing requires a backer and thus Bitcoin would only be as secure as the individuals holding the backing asset. What then is the point?

lindatess

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Quote from: MysteryMiner on November 13, 2013, 10:48:22 PM

Then probably I will be able to purchase all bitcoins with 21M USD. This is never going to happen. ZOG will never put fixed price on papers, BTC and metals. If Bitcoin really is becomes a threat then they will do what they do always. Ban, make it illegal.

Hear, Hear. +1

For History. For Liberty Dollars. For E-Gold. For Liberty Reserve. For Stormpay. And Much Much More.

The problem is a takedown is coming sooner rather than later.

The CIA has already had a chat with one of the developers... It's a fact.

Quote from: niothor on November 14, 2013, 03:38:48 AM

Remember that the CIA knew about how bitcoin works before most of the people here , and they did have .... a.. trusted source of information.

Coinseeker

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Quote from: beetcoin on November 14, 2013, 03:27:12 AM

Quote from: Coinseeker on November 14, 2013, 03:17:17 AM

Three reasons this will never happen:

1. The government is not scared of Bitcoin
2. Bitcoin is not ready to fill such a void.
3. The US will NEVER embrace a deflationary currency.

why is government not scared of bitcoin? it presents an issue for them.. money can't be taxed with BTC. at its current level, i think government doesn't care about it right now.. but if it hits a market cap of something like 500 billion? hell yeah, their eyes will open.

No, there eyes won't open. They may embrace the concept of cryptographic currency but as I've recently come to better understand, they will never embrace something lead by Austrian economics. It's really as simple as that. They would create their own "USDCoin" before they accepted something like Bitcoin.

Bitcoin is hoping to convert people to an entirely different theory of economics and it's just not going to happen. Best Bitcoin can hope for, is being the "Internet Currency". Just my opinion.

niothor

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in defi we trust

Quote from: beetcoin on November 14, 2013, 03:27:12 AM

Quote from: Coinseeker on November 14, 2013, 03:17:17 AM

Three reasons this will never happen:

1. The government is not scared of Bitcoin
2. Bitcoin is not ready to fill such a void.
3. The US will NEVER embrace a deflationary currency.

why is government not scared of bitcoin? it presents an issue for them.. money can't be taxed with BTC. at its current level, i think government doesn't care about it right now.. but if it hits a market cap of something like 500 billion? hell yeah, their eyes will open.

Most of the people here have an idea imprinted on their brain , like
- the government is stupid , they don't know how bitcoin works
- the government people can't use a cellphone , they have no idea about technology
- the government can't do anything to me
- the government is spying on you , they can trace your every move , they can decrypt your emails , they can even make somebody die in car "accident" if they want

With point 4 on total opposition with the first 3 , why can't you assume that they already have a solution for it?
Remember that the CIA knew about how bitcoin works before most of the people here , and they did have .... a.. trusted source of information.

From my point of view , I hope not... but just like tor and sr , time will tell.

beetcoin

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Quote from: Coinseeker on November 14, 2013, 03:17:17 AM

Three reasons this will never happen:

1. The government is not scared of Bitcoin
2. Bitcoin is not ready to fill such a void.
3. The US will NEVER embrace a deflationary currency.

why is government not scared of bitcoin? it presents an issue for them.. money can't be taxed with BTC. at its current level, i think government doesn't care about it right now.. but if it hits a market cap of something like 500 billion? hell yeah, their eyes will open.

Coinseeker

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Three reasons this will never happen:

1. The government is not scared of Bitcoin
2. Bitcoin is not ready to fill such a void.
3. The US will NEVER embrace a deflationary currency.

EmperorBob

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To do a 1-1 peg properly, the government must be willing to let you exchange in both directions at almost the same rate.
So, if they want to peg usd to silver at 1$/ounce, they must be able to give you an ounce of silver for every dollar, and vice-versa. This would require the Treasury to have 102,058,283 metric tons of silver in reserves, or about 1/4 of the mass of all humans, or about 200 times the total world reserves of silver.

Then to peg bitcoin to silver at one bitcoin per ounce, they would need to be able to produce up to 3.6 trillion bitcoins if and when people exchange their silver. This can't work.

mb300sd

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Quote from: DeathAndTaxes on November 13, 2013, 11:16:06 PM

Which is no different then the US govt putting a bid order for Bitcoins @ $1.00. Right now there are lots of low bid orders and nobody gives a crap.

When a government fixes a currency (like US on gold standard or China maintaining a peg to the dollar) they control both sides. If the price of Gold rises above the peg the govt sells gold from reserve to pull prices back down, if the price of gold falls below the standard the government prints more dollars to reduce the purchasing power of the dollar to the standard. You can't win against the government so most people stop trying.

The US govt putting a massive bid order for Bitcoins @ $1 USD per BTC would look beyond pathetic. It would be seen as a sign of support for Bitcoin. The most powerful government in the world is worried about Bitcoin and likely the price would explode two or three magnitudes higher.

This is what happens when the government gets on the wrong side of a peg.

Quote

On September 16, 1992, Black Wednesday, Soros' fund sold short more than $10 billion in pounds,[23] profiting from the UK government's reluctance to either raise its interest rates to levels comparable to those of other European Exchange Rate Mechanism countries or to float its currency.
Finally, the UK withdrew from the European Exchange Rate Mechanism, devaluing the pound, earning Soros an estimated $1.1 billion. He was dubbed "the man who broke the Bank of England".[28] In 1997, the UK Treasury estimated the cost of Black Wednesday at £3.4 billion.

Lauda

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Terminated.

Quote from: justusranvier on November 13, 2013, 10:44:01 PM

You have no idea how prices or currency work.

Start by Googling "supply and demand curves" and come back when you can explain how this could ever actually happen even if they wanted to do it.

Magic (they'll just pass a law) is not an acceptable explanation.

This.
OP it won't happen, actually it can't happen.

DeathAndTaxes

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Gerald Davis

Which is no different then the US govt putting a bid order for Bitcoins @ $1.00. Right now there are lots of low bid orders and nobody gives a crap.

When a government fixes a currency (like US on gold standard or China maintaining a peg to the dollar) they control both sides. If the price of Gold rises above the peg the govt sells gold from reserve to pull prices back down, if the price of gold falls below the standard the government prints more dollars to reduce the purchasing power of the dollar to the standard. You can't win against the government so most people stop trying.

The US govt putting a massive bid order for Bitcoins @ $1 USD per BTC would look beyond pathetic. It would be seen as a sign of support for Bitcoin. The most powerful government in the world is worried about Bitcoin and likely the price would explode two or three magnitudes higher.

NewLiberty

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Gresham's Lawyer

Quote from: BADecker on November 13, 2013, 11:10:02 PM

Quote from: DeathAndTaxes on November 13, 2013, 10:58:42 PM

You can't fix a currency to something (gold, oil, another currency) unless you have complete control over both the currency (supply, printing, inflation) and the reserve.

But when you have complete control over the currency, you can gradually bring a commodity under your control by offering x amount of currency for y amount of the commodity at the state-controlled banks.

Quote from: DeathAndTaxes on November 13, 2013, 10:58:42 PM

The US government can't control the supply of Bitcoin so trying to fix it to silver would be futile. So govt says 1 BTC = 1 oz of silver. Ok people are trading it for 10x that. It just makes the government look stupid and powerless.

Government doesn't care about looking stupid if they can nip it in the bud. Government doesn't have to control the supply of Bitcoin. That is already done in the Bitcoin parameters - 21 million. All they would be offering to do is buy your bitcoin for an ounce of silver, same as the dollar.

I'd outbid them 10 silver to 1 bitcoin, and laugh at anyone who took paper dollars.

BADecker

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Quote from: DeathAndTaxes on November 13, 2013, 10:58:42 PM

You can't fix a currency to something (gold, oil, another currency) unless you have complete control over both the currency (supply, printing, inflation) and the reserve.

But when you have complete control over the currency, you can gradually bring a commodity under your control by offering x amount of currency for y amount of the commodity at the state-controlled banks.

Quote from: DeathAndTaxes on November 13, 2013, 10:58:42 PM

The US government can't control the supply of Bitcoin so trying to fix it to silver would be futile. So govt says 1 BTC = 1 oz of silver. Ok people are trading it for 10x that. It just makes the government look stupid and powerless.

Government doesn't care about looking stupid if they can nip it in the bud. Government doesn't have to control the supply of Bitcoin. That is already done in the Bitcoin parameters - 21 million. All they would be offering to do is buy your bitcoin for an ounce of silver, same as the dollar.

justusranvier

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Quote from: DeathAndTaxes on November 13, 2013, 10:58:42 PM

You can't fix a currency to something (gold, oil, another currency) unless you have complete control over both the currency (supply, printing, inflation) and the reserve.

The US government can't control the supply of Bitcoin so trying to fix it to silver would be futile. So govt says 1 BTC = 1 oz of silver. Ok people are trading it for 10x that. It just makes the government look stupid and powerless.

...and that's why this forum needs to enable Spoiler tags.

They'll never learn if you do their homework for them.

NewLiberty

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Gresham's Lawyer

This is already done, but better, and without the government, with coldhardca.sh

Rather than fixing a price to a currency (which is essentially making the currency a token for that to which you fix it), we let the market set the exchange rate, and do it in real time. This is what is called the flexible gold standard, or bimetallic standard if we include silver (we do).

The best minds currently advocating hard money standards tied to currency are following this model, and what is better is that you don't have to wait for a government to do this (hint: you will grow very old waiting). Instead it is already being done. Why wait?

We had long contemplated the way to do this with the Liberty Dollar which was the most successful alternative currency of its time and reputedly an inspiration for Satoshi Nakamoto, and later we did do it with the New Liberty Dollar as well, and now have evolved the model even further with the Bitcoin Specie.

It ties the precious metal bimetallic coin standard to not just the US Dollar, but more importantly to Bitcoin and to the major currencies of the world,
coldhardca.sh.

It is a new project and has relied on the wisdom and criticism of this community to come to fruition.
https://bitcointalksearch.org/topic/bitcoin-specie-project-sponsored-by-the-makers-of-new-liberty-dollar-269535

In the US, you can go to a bank, deposit money, and they show up at your home courtesy of the US Post office.

DeathAndTaxes

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Gerald Davis

You can't fix a currency to something (gold, oil, another currency) unless you have complete control over both the currency (supply, printing, inflation) and the reserve.

The US government can't control the supply of Bitcoin so trying to fix it to silver (or anything) would be futile. So govt says 1 BTC = 1 oz of silver. Ok people are trading it for 10x that. It just makes the government look stupid and powerless. Say Bitcoin skyrockets from that 10:1 ratio between the "official value" and market value to something like 50:1 or 2,000:1 it just makes the government look even more stupid over time.

BADecker

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Quote from: MysteryMiner on November 13, 2013, 10:48:22 PM

Then probably I will be able to purchase all bitcoins with 21M USD. This is never going to happen. ZOG will never put fixed price on papers, BTC and metals. If Bitcoin really is becomes a threat then they will do what they do always. Ban, make it illegal.

Difficult to ban. You would have to take industry offline just to stop industry from using Bitcoin under the table. Take industry offline and you lose all the way around as a government. Besides, the people would cry out against Internet controls.

notthematrix

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Quote from: ?? on ??

Quote from: MysteryMiner on November 13, 2013, 10:48:22 PM

Then probably I will be able to purchase all bitcoins with 21M USD. This is never going to happen. ZOG will never put fixed price on papers, BTC and metals. If Bitcoin really is becomes a threat then they will do what they do always. Ban, make it illegal.

＋1

China , Brasil , South america , oulawing bitcoin will not help.
only will isolate the U.S like north korea

BADecker

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Quote from: grue on November 13, 2013, 10:34:28 PM

The only reason people traded their gold/silver for bills was because metals were hard to safeguard and inconvenient for trade. this is not true with bitcoin. Therefore no one would trade their bitcoins for "bitcoin bills" issued by the US government, except in very small amounts for convenience purposes (microtransactions, physical payments, etc)

Not "bitcoin bills." Rather, simply anyone could go to the bank and exchange their dollar or their bitcoin for, say, an ounce of silver. The point would be to place Bitcoin on an equal footing with the Dollar.

Of course, nobody would go to the bank and get an ounce of silver at today's bitcoin prices. But everyone would become a bit leery about obtaining more bitcoins for investment purposes when the bank was saying that they were willing to give them only the same amount of silver for a bitcoin as for a dollar. They wouldn't know for sure what other folks were doing. So, they would be a little slower to buy or trade for bitcoins.

Wouldn't this start to bring the dollar back up with relation to bitcoin?

MysteryMiner

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Death to enemies!

Then probably I will be able to purchase all bitcoins with 21M USD. This is never going to happen. ZOG will never put fixed price on papers, BTC and metals. If Bitcoin really is becomes a threat then they will do what they do always. Ban, make it illegal.

Topic: What if Gov puts the Dollar and Bitcoin on the Silver Standard, 1 to 1? (Read 1877 times)