BITCOIN

IvanOpinion

A non sequitor argument.  I wonder how governments would have 'afforded' to cover this crisis using cryptocurrency?  Maybe tell everyone that the NHS was bust and therefore you would have to pay for your own treatment, vaccinations and tests or maybe they would have put taxation through the roof from day 1.

There is a very strong case for electronic currencies but nothing about today fulfills the need!

Notepad_Phil

IvanOpinion said:

A non sequitor argument.  I wonder how governments would have 'afforded' to cover this crisis using cryptocurrency?  ...

Obviously they would just buy a few btc and then wait for them to go to the moon 

Zola.

IvanOpinion said:

A non sequitor argument.  I wonder how governments would have 'afforded' to cover this crisis using cryptocurrency?  Maybe tell everyone that the NHS was bust and therefore you would have to pay for your own treatment, vaccinations and tests or maybe they would have put taxation through the roof from day 1.

There is a very strong case for electronic currencies but nothing about today fulfills the need!

The point isn't about this crisis, at all.... the incomprehensibly large global debt hasn't been suddenly created in this crisis, it's been there for a long time. What the crisis has done, though, is make those unpayable debt levels exponentially higher. 

IvanOpinion

The point still stands - how would bitcoin handle things any better?  The answer is it wouldn't and quite probably would make things much worse.  As I said we need e-currencies, but the current offerings are little more than monopoly money changing hands.

spnego

IvanOpinion said:

The point still stands - how would bitcoin handle things any better?  The answer is it wouldn't and quite probably would make things much worse.  As I said we need e-currencies, but the current offerings are little more than monopoly money changing hands.

If we were in a bitcoin based system, a bitcoin standard if you will then governments wouldn't be able to magic up money out of thin air to pay for things they would have to borrow real bitcoin.
The main advantage in this system is that the citizens of that country do not get poorer when the government does this, prices of things do not continually go up forever and an end to the hunt for ever higher paying jobs to counter the inflation.

barnstar2077

spnego said:

IvanOpinion said:

The point still stands - how would bitcoin handle things any better?  The answer is it wouldn't and quite probably would make things much worse.  As I said we need e-currencies, but the current offerings are little more than monopoly money changing hands.

If we were in a bitcoin based system, a bitcoin standard if you will then governments wouldn't be able to magic up money out of thin air to pay for things they would have to borrow real bitcoin.
The main advantage in this system is that the citizens of that country do not get poorer when the government does this, prices of things do not continually go up forever and an end to the hunt for ever higher paying jobs to counter the inflation.

Who wouldn't want to magic up money out of thin air, how could more debt for the country be better?  You don't think that increasing a countries debt every time there is a financial blip that needs taking care of wouldn't end in higher taxes for it's citizens to pay for it?  Saying that switching to a currency that can't be interfered with by the government would be better is crazy imo.

Don't forget that when it prints money, as long as that money is spent in the UK, then it ends up in the economy anyway, which benefits everyone.

barnstar2077

IvanOpinion said:

The point still stands - how would bitcoin handle things any better?  The answer is it wouldn't and quite probably would make things much worse.  As I said we need e-currencies, but the current offerings are little more than monopoly money changing hands.

We have an e-currency called the pound sterling that works just fine online already.  I can pay for things with just the wave of a card or phone, pay my bills, and access my bank accounts online.  The only thing it doesn't do is provide the hope of a get rich quick scheme.

Section62

spnego said:

IvanOpinion said:

The point still stands - how would bitcoin handle things any better?  The answer is it wouldn't and quite probably would make things much worse.  As I said we need e-currencies, but the current offerings are little more than monopoly money changing hands.

If we were in a bitcoin based system, a bitcoin standard if you will then governments wouldn't be able to magic up money out of thin air to pay for things they would have to borrow real bitcoin.
The main advantage in this system is that the citizens of that country do not get poorer when the government does this, prices of things do not continually go up forever and an end to the hunt for ever higher paying jobs to counter the inflation.

So you are saying it would be a good thing if Governments were unable to 'borrow' money in an emergency - for example in case of a global pandemic caused by a novel virus - other than by relying on a global currency whose value is controlled by very wealthy speculators?

I'm not sure the general population would welcome an idea like that as an "advantage" as much as crypto enthusiasts would.

That phrases like "real bitcoin" are entering the discussion show how strained the logic is getting.

Notepad_Phil

spnego said:

IvanOpinion said:

The point still stands - how would bitcoin handle things any better?  The answer is it wouldn't and quite probably would make things much worse.  As I said we need e-currencies, but the current offerings are little more than monopoly money changing hands.

If we were in a bitcoin based system, a bitcoin standard if you will then governments wouldn't be able to magic up money out of thin air to pay for things they would have to borrow real bitcoin.
The main advantage in this system is that the citizens of that country do not get poorer when the government does this, prices of things do not continually go up forever and an end to the hunt for ever higher paying jobs to counter the inflation.

Sounds very similar to the gold standard, or do you see any critical difference between that discredited system and your idea?

User232002

IvanOpinion said:

The point still stands - how would bitcoin handle things any better?  The answer is it wouldn't and quite probably would make things much worse.  As I said we need e-currencies, but the current offerings are little more than monopoly money changing hands.

1. It creates an open, transparent, auditable financial system where everyone knows who owns what at all times. In 2008, nobody knew which banks where the most exposed because nobody knew who owned which assets. The current financial system is a black box, which allows risk to build up in opaque ways. There are numerous examples of this, Bill Hwang and Chinese RE being the latest examples. Put it on a Blockchain and I can see exactly which entities own which assets at any given time. "Don't trust; Verify."

There are open lending protocols in the cryptocurrency world that anybody can use. Currently these protocols handle hundreds of billions of dollars of loans and assets. Despite there being multiple -30%+ crashes in asset values over the last two years, there have been no major insolvency issues in this space to date. The financial system being built here is one of the most robust and safest ever created. It will simply out compete the incumbent system and participants.

2. An inflation neutral reserve asset, where the emission schedule is known, agreed upon and unchanging would incentivise people to lengthen their time preference. Whatever the level of inflation is, whether you believe its been approximately 2% or significantly higher for the last decade, inflation forces people to spend money rather than see the value of that money decrease. This encourages a short time preference, the now over the future, and a consumerist society. In a world where you knew that 10,000 BTC could buy you two pizza's today or a small Island in a decade, you are incentivised to lengthen your time preference and consider your discretionary spending. The world is currently living beyond its means and needs to be forced in to considering whether it really needs a new set of plastic toys from China or a new wardrobe of rehashed clothing designs from Vietnam.

barnstar2077 said:

Who wouldn't want to magic up money out of thin air, how could more debt for the country be better?  You don't think that increasing a countries debt every time there is a financial blip that needs taking care of wouldn't end in higher taxes for it's citizens to pay for it?  Saying that switching to a currency that can't be interfered with by the government would be better is crazy imo.

A financial blip should absolutely result in increased taxes and reduced living standards. Perhaps if there were real consequences to actions then people would put more thought in to their actions, otherwise you simply end up with moral hazard permeating every business decision. At the start of the pandemic, IAG (Owners of British Airways) had $9B in cash on their balance sheet due to prudent business practice. Meanwhile, Delta, AA and United had spent years using their profits to buy back shares from the market to boost CEO pay and quickly asked for a bailout from the US government. How do you think IAG will act going forward? What does this mean for the amount of money needed in QE in a future 'financial blip'? Is this sustainable?

Every time there is a 'crisis' we kick the can down the road because we want to avoid the immediate pain of reduced living standards and paying debts that have become due. I view volatility as an expression of a system; you can have a system that allows volatility which will result in intermediate pain every now and then, like Bitcoin, or you can attempt to suppress the volatility by something like QE. However, unfortunately, I believe the latter simply accumulates problems until they become too big to fix. 

barnstar2077 said:

Don't forget that when it prints money, as long as that money is spent in the UK, then it ends up in the economy anyway, which benefits everyone.

Surely, you don't actually believe this? You must know that this is incorrect. We all, as children, come to the question of 'Why not just print loads of money and allow everyone to be a millionaire?' And I think we all, on some level, understand that the real world can not work like that.

Bitcoiners have been pointing out that inflation was inevitable for the last year at least and now the fed has finally walked back from its 'transitory' language. Unfortunately, I believe what you have stated here will however be the next narrative; that inflation can be a 'good' thing for the economy and society. 

barnstar2077 said:

We have an e-currency called the pound sterling that works just fine online already.  I can pay for things with just the wave of a card or phone, pay my bills, and access my bank accounts online.  The only thing it doesn't do is provide the hope of a get rich quick scheme.

All you've done here is doxx yourself as someone who has no actual idea of how the current financial system works beyond the user interface of your banks 'online banking' app. Time to finality in legacy finance (thats your card and your bank) is 2-3 days. In many instances, such as international transfers, its longer. Time to finality in Bitcoin is 30 minutes. Time to finality in other layer one Blockchains is measured in seconds. 

Everyone watches a BBC video on how Bitcoin works and thinks they are experts. To suggest that Blockchain isn't a massive leap forward over existing technology is just ignorance. That you can also combine finality with trustlessness and smart contract applications will see it out compete the legacy system. 

Notepad_Phil said:

Sounds very similar to the gold standard, or do you see any critical difference between that discredited system and your idea?

1. A gold standard system is hard to audit. The federal reserve hasn't been audited for several decades I believe. BTC is an open and transparent Blockchain that anyone can audit with a few clicks in their browser.
2. Gold is a difficult asset for ordinary citizens to buy and store, resulting in inequality of accessibility. BTC can be self custodied in your head by remembering 12 words.
3. The emission and availability of Bitcoin is known in perpetuity. It is unknown for gold.
4. Its a misrepresentation to say that the gold standard was 'discredited.' There are multiple schools of thought in modern economics on the issue and there are plenty of educated people that believe the abolition of the gold standard was a mistake.

Not many Bitcoiners are in favour of the complete abolition of fiat currencies. Its a very vocal minority. However, citizens are entitled to an avenue to protect their wealth outside of their nations currency that protects them from rampant debasement.