BITCOIN

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. 

Cus

How do you ensure transparency with bitcoin ownership? Does that mean I can identify how many bitcoin any company or person owns?  Do these addresses or wallets (sorry not sure) allow identification? Do you have to be registered somewhere?

User232002

Cus said:

How do you ensure transparency with bitcoin ownership? Does that mean I can identify how many bitcoin any company or person owns?  Do these addresses or wallets (sorry not sure) allow identification? Do you have to be registered somewhere?

The entire BTC blockchain, that has recorded every transaction since inception, is 360GB, so you could download it and use that - but its easier to use web based versions such as https://www.blockchain.com/explorer or https://etherscan.io/

You can follow any transaction or wallet on the blockchain that you want. Earlier this year, I raised a question to a team in a discord chat when they moved 700 ETH without telling their users - the open nature allows users to hold people to account. Coinbase holds a lot of users BTC. Their wallet addresses are known which is how we know that (1) they hold the BTC they claim to on behalf of users and (2) the numbers of BTC on such exchanges is going down - which means institutions are buying it and taking custody of it themselves.

Once you know someones wallet address, you can track that address and any coins from or to that address in perpetuity. This is why the blockchain is not a good place to hide illegal transactions despite what unaware people continue to claim. Many institutional addresses (such as Coinbase, Binance etc) are known given the sheer size of them. I would be in favour of regulation requiring large holders to publically disclose their addresses (they are all large public companies or, in rare cases, UHNW individuals) in filings but it doesnt matter too much because the market will likely take care of this anyway.

Notepad_Phil

darren232002 said:

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. 

1) You can indeed audit BTC with a few clicks, assuming of course that you're running untainted software 
2) The gold standard did not necessitate that ordinary citizens bought gold itself so I'm unsure of your point. But regarding self-custody by remembering 12 words, I'm pretty sure that's not too difficult when you're in your prime, but anyone who has aged relatives will realise the almost impossibility of that being a plus when someone is in their advanced years.
3) So you know for a fact that in a 1000 years that Bitcoin will still be around and used (even as some direct descendant of Bitcoin). The ones and zeroes used by bitcoin can't be used to make pretty jewellery, so I'm fairly sure that if one remains in perpetuity then that one will be gold.
4) Yes there are educated people who believe the abolition of the gold standard was a mistake, but they are in a minority and outweighed by the numbers of educated people who would indeed say that it was indeed a discredited system.

Your idea of having the government paying for things by borrowing BTC would run through many of the same scenarios which caused the ditching of the gold standard. In the current covid situation I'd hope that any government running such a BTC scheme would have ditched it in double quick time. Any problems caused by inflation from Covid QE (and not from the inflation caused by the opening up of society when every company suddenly wants everything at once) is I would suggest minor to the unemployment and health issues that the restriction of borrowing would bring.

User232002

Notepad_Phil said:

1) You can indeed audit BTC with a few clicks, assuming of course that you're running untainted software 

This is either really dumb or really sarcastic and I'm not sure which.

Notepad_Phil said:

2) The gold standard did not necessitate that ordinary citizens bought gold itself so I'm unsure of your point. But regarding self-custody by remembering 12 words, I'm pretty sure that's not too difficult when you're in your prime, but anyone who has aged relatives will realise the almost impossibility of that being a plus when someone is in their advanced years.

In 1933, the US mandated a set price for gold and a maximum amount that citizens were allowed to possess. The fact they could do this is a weakness of the gold standard. Bitcoin can be self-custodied and thus is not this vulnerable.

The rest of your quoted point is a spectacularly bad argument.

Notepad_Phil said:

3) So you know for a fact that in a 1000 years that Bitcoin will still be around and used (even as some direct descendant of Bitcoin). The ones and zeroes used by bitcoin can't be used to make pretty jewellery, so I'm fairly sure that if one remains in perpetuity then that one will be gold.

This is a ridiculous strawman argument. No company or government has been around for 1000 years so by your analogy we should probably consider all stocks and bonds as worthless.

Nobody is buying Bitcoin or making any investment decision because of events they think may or may not happen in 1000 years.

Notepad_Phil said:

4) Yes there are educated people who believe the abolition of the gold standard was a mistake, but they are in a minority and outweighed by the numbers of educated people who would indeed say that it was indeed a discredited system.

I'm not a fan of the gold standard and I'm not advocating for its return, I just think its important to point out there are many academics who would point out that it did have positives. However, I don't believe the alternative of a fiat currency that enriches a select few at the expanse of many is a stable solution. If we have two bad options, the discussion shouldn't be between choosing A or B.

Notepad_Phil said:

Your idea of having the government paying for things by borrowing BTC would run through many of the same scenarios which caused the ditching of the gold standard.

Why should a government have to borrow money at all? Why can't governments just, y'know like regular people, live within their means? (Broadly speaking) 

But again, your argument is another strawman to me at least, as I'm not arguing that governments borrow or peg their currencies to Bitcoin. Its pretty obvious that no country should borrow money in a currency that they can not print.

Fiat and BTC can co-exist and I expect they will. If a country prints a load of money, their currency will devalue against Bitcoin. The net affect being that governments are incentivised to live within their means or their citizens are incentivised to put their wealth in to BTC rather than that countries fiat alternative.

HHarry

darren232002 said:

Notepad_Phil said:

3) So you know for a fact that in a 1000 years that Bitcoin will still be around and used (even as some direct descendant of Bitcoin). The ones and zeroes used by bitcoin can't be used to make pretty jewellery, so I'm fairly sure that if one remains in perpetuity then that one will be gold.

This is a ridiculous strawman argument. No company or government has been around for 1000 years so by your analogy we should probably consider all stocks and bonds as worthless.

Nobody is buying Bitcoin or making any investment decision because of events they think may or may not happen in 1000 years.

But the comparison wasn’t with companies or governments, it was with gold, which has been used as payment or a store of wealth for hundreds if not thousands of years.