BITCOIN

Zola.

Aegis said:

Zola. said:

Much like separating religion from government policies .. Cutting off the ability to print endless amounts of money to then invade another country would be another benefit in moving to a Bitcoin standard.

If the government had to raise that money honestly they'd think twice about the true cost and consequences of war 

History would very much suggest that this wouldn't be a barrier at all.  In fact, the vast majority of wars we've been involved in were when we had an asset-backed currency.  There are plenty of discussions to be had around currency and asset-backing vs fiat, but the idea that an asset-backed currency would reduce wars is just not even close to true.

The fall of the roman empire was largely down to continuous currency debasement via coin clipping, which was used to fund wars, via taxation essentially. That would be impossible with bitcoin. 

What's happening today is not too dissimilar - using the money printer and subsequent taxes to fund military spending and ultimately wars.

We're moving off topic from the most recent discussions...but I think we can all agree bitcoin is a fascinating concept and one that has barely begun to take hold in the world. 

Section62

Zola. said:

Aegis said:

Zola. said:

Much like separating religion from government policies .. Cutting off the ability to print endless amounts of money to then invade another country would be another benefit in moving to a Bitcoin standard.

If the government had to raise that money honestly they'd think twice about the true cost and consequences of war 

History would very much suggest that this wouldn't be a barrier at all.  In fact, the vast majority of wars we've been involved in were when we had an asset-backed currency.  There are plenty of discussions to be had around currency and asset-backing vs fiat, but the idea that an asset-backed currency would reduce wars is just not even close to true.

The fall of the roman empire was largely down to continuous currency debasement via coin clipping, which was used to fund wars, via taxation essentially. That would be impossible with bitcoin. 

So Bitcoin could have saved the Roman Empire?  If only they had invented the Blockchain instead of straight roads and plumbing.

Makes me wonder when someone else will come along claiming Bitcoin can cure cancer.  Although I've got a feeling if I put those words into google I'll find someone has put forward that idea already.....

IvanOpinion

Section62 said:

Makes me wonder when someone else will come along claiming Bitcoin can cure cancer.  Although I've got a feeling if I put those words into google I'll find someone has put forward that idea already.....

Waves hand Not bitcoin, but one of the companies I work for is looking at ways the block chain can be leveraged to make it easier to mine data in relation to determining patterns in relation to the treatment of cancer.  I see huge value and understand blockchain technology but, as it stands at the minute, crypto currency is far too early in its evolution to be of mainstream use.

Section62

darren232002 said:

Section62 said:

Because 'regular people' elect governments to do stuff which costs money and that money isn't always on hand to be spent. Nor is putting up taxes always an option.

Just to avoid some silly semantics here, I'm not referring to cash flow issues when I talk about borrowing. I think its fine for a government to borrow money throughout a tax year to alleviate cash flow issues associated with receiving tax revenues in large chunks on specific dates.

Yup, I worked in Government long enough to know that in-year cash flow is not a problem.  The things I had in mind relate more to spending and in particular spending on infrastructure.  Few global governments would be able to spend £100Bn+ building (say) a railway wholly within their annual disposable income - especially not when the revenue from that infrastructure won't start arriving for a couple of decades.

However, to follow through on your 'regular people' argument - these 'regular people' borrow fantastic sums to buy a roof over their head. Arguably its insane that people are willing to spend so much on a property, but neither would most people be able to buy a property outright 'within their means' if prices were a factor of 10 cheaper.  What is the intrinsic difference between borrowing £100k to buy a house, or £100Bn to buy a railway?

'Regular people' borrow to live their dreams.  There are enough people who want governments to do the same to mean this issue is greater than the type of currency we use. Changing the currency won't fix the problem.

darren232002 said:

However, consistent deficit spending (living beyond your means) can't be condoned. The bill comes due at some point and you can't put it off forever. This has to be a self evident truth surely - If you genuinely believe that borrowing can be done with impunity then why can't we just 'borrow' (because by borrow, we really mean print) a few trillion and make everyone a millionaire? 

Historically, deficit spending was conducted in the hope that higher future growth would allow you to pay off your accrued debt in the future. However, growth and productivity have been consistently trending down in the UK (and many western countries) for some time now and the debt has approached such a size that this argument doesn't seem to hold much water any more. How high does growth have to be and for how long just to pay off the current accrued debt? Does that seem realistic? The current best hope is technological innovation - but tech companies seem more interested in getting everyone to scroll through adverts for cheap tat  than providing the lower tranches of Maslow's needs in a more efficient manner.

Form a political party, get yourself elected on a platform of austerity, live your dream.

Section62

Zola. said:

...........

Given you heavily edited your original post while I was relying to it, I wonder whether the "point" you refer to is what you originally said, or the version people can now see?

Zola.

IvanOpinion said:

Section62 said:

Makes me wonder when someone else will come along claiming Bitcoin can cure cancer.  Although I've got a feeling if I put those words into google I'll find someone has put forward that idea already.....

Waves hand Not bitcoin, but one of the companies I work for is looking at ways the block chain can be leveraged to make it easier to mine data in relation to determining patterns in relation to the treatment of cancer.  I see huge value and understand blockchain technology but, as it stands at the minute, crypto currency is far too early in its evolution to be of mainstream use.

Curious to know how a blockchain could provide value here? The entire purpose of "blockchain technology", which was created in bitcoin is to record indisputable and cash final payments. Nothing else.

Mine data? Please tell me what you mean by that?! 

lozzy1965

Wow, you guys have gone big with the arguments now!  Wars, the Roman Empire, long term debt, the Gold Standard.  The trouble is I still find myself saying, "Yes, Bitcoin/crypto is the answer.... Oh wait, no it's not.... Yes it is... etc etc."
I sound like the kind of person who should be scammed, if only I didn't have that healthy dose of scepticism in me all the time
I guess that just means it is early days for the tech.

User232002

Notepad_Phil said:

I was heavily involved in software engineering so my mention of tainted software was more of a throwaway warning. Code can always potentially be tampered with - it might be very difficult but it's not impossible, and no I'm not talking about 51% attacks or other such unsubtle methods.

You were "heavily involved in software engineering," yet you think a Bitcoin blockchain explorer website can somehow do, well I don't know what, but something... bad? You don't need to download any software at all to view blockchain transactions, so I have no idea what you are babblering on about... Not to mention that the Bitcoin code (if you were to download it) is open source, has a $1T bounty on its head and the space is filled with people at the bleeding edge of computer science.

Seriously, bore off with your appeals to authority; you have no idea what you are talking about and you are well out of your depth.

Notepad_Phil said:

Self-custody is great until it's not - be it forgetting or losing the slip of paper with your 12 words on, or however else you've lost access to it. I wonder what the percentage of bitcoins in lost wallets is at now?

Really? You're going to continue to argue a point based on the subset of people that (1) suffer from dementia, (2) have non trivial liquid assets, (3) can retain their faculties enough to reason through macro economic issues and come to independent decisions on asset investment, but (4) can't remember, nor write down or otherwise retain, 12 words? I imagine such a subset is an empty set, but if it is not then you'll be pleased to hear that there are 3rd party custody options out there for such people.

If adult humans truly lack the capacity to retain 12 words over a medium to long term time horizon then the human race has bigger issues than its financial system. 

Notepad_Phil said:

It was you who was talking of bitcoin perpetuity, so I'm not sure how you can complain about my mention of 1000 years.

Because, as everyone always does here, you twisted the point I made in to a point you wanted to argue about. I said that the emission schedule of Bitcoin is known in perpetuity. This is a true statement as its dictated by code. Contrary to your assertion, I don't really know nor care whether Bitcoin will be in actual use in 1000 years or not. In fact, I'd be quite disappointed if the human race hasn't thought of something better by that point.

But making any investment with a 1000 year time horizon is just incredibly incredibly stupid. As is believing in gold in the present day because it happened to be the best approximate solution to a problem the human race had a few thousand years ago.

User232002

Section62 said:

However, to follow through on your 'regular people' argument - these 'regular people' borrow fantastic sums to buy a roof over their head. Arguably its insane that people are willing to spend so much on a property, but neither would most people be able to buy a property outright 'within their means' if prices were a factor of 10 cheaper.  What is the intrinsic difference between borrowing £100k to buy a house, or £100Bn to buy a railway?

People finance mortgages on the basis that their disposable income can cover the cost of a mortgage payment at the current time and prices. The debt is sustainable. However, as you pointed out, governments don't do this;

Section62 said:

Few global governments would be able to spend £100Bn+ building (say) a railway wholly within their annual disposable income 

Governments finance debt by promising that the growth from the infrastructure spend will result in increased receipts which will enable them to pay the debt. Growth has been trending down for years in developed economies.

If you want to compare this to traditional mortgage finance, its a person on £20k/yr getting a £1M mortgage and promising that they will get a better job and eventually pay it back. And we are in a world of stagnant wage growth.

Section62 said:

Form a political party, get yourself elected on a platform of austerity, live your dream.

Why do you insist on assuming that if I don't want A then I must clearly want B? The answer to unrestricted QE is not austerity. There is nuance and middle ground in sensible monetary policy. Can we borrow to finance a new STEM focused university campus with low tuition fees? Yes. Can we borrow to cut 20 minutes off peoples commute time from Birmingham to London? Probably not.

bugbyte_2

Consider the following chart


Our National Debt is lower than at most points in the last three hundred years. By raising debt to invest in itself the UK has been at the top of, and maintained a position in the top 6, economically developed countries in the world (currently no 5).

The UK can do this because the £ is a reserve currency, meaning it can borrow at ridiculously low interest rates, and further more it can borrow off itself - The Gov issues guilts which are then brought by the Bank of England, which is owned by us. So effectively, we are borrowing from ourselves, so not actually a problem. Reserve currency governments have always used inflation to inflate away debt and this will happen again now. It is also fair to say that average wage growth tracks inflation over the long term so again, inflation is not necessarily an issue.  

IMHO separating the ability to control money - i.e. Bitcoin - from the state would mean none of the above could happen, and therefore right now after Covid the country would be royally stuffed. 

As regards HS2 its not about getting the London 20 min earlier its about capacity but you knew that.