Bitcoin is fiat money, too • Hacker News Board

Re: Bitcoin is fiat money, too

#231

Post by AlexCoventry » Sat, Sep 23, 2017, 7:43 AM UTC

labster wrote: post #183

mirimir wrote: post #180

Earlier quoted context omitted.

Yes, that's the distinction. With Bitcoin, a codebase prevails if it attracts enough miners, merchants and users. Those parties in aggregate have "fiat power". It's arguable that fiat power for each state similarly reflects preferences of banks, merchants and users. However, some of us doubt that money policy typically favors users. With government fiat, forking isn't really possible, without a revolution, no matter…

So you're telling me that government money, where everyone gets a say in policy through republican institutions, is worse than a system where the most wealthy users get more control of the currency. Um, okay. I guess the oligarchy is more explicit in the cryptocurrency.

If you really think you have a say in monetary policy, I suggest you read Barofsky's Bailout.

Re: Bitcoin is fiat money, too

#232

Post by erikb » Sat, Sep 23, 2017, 7:53 AM UTC

noddy1 wrote: post #145

Had a chat with a high ranking public tax official last week who said that the age of secret offshore bank accounts is over - mass leaks resulting from bounties mean that any rogue employee with a USB of account information can get a 7 figure payout from major goverments. So where to now for high net worth people/families? I would absolutely be piling my wealth into anonymous cryptocurrencies - zcash, monero, and wel…

All the information was always out there not hard to find. Actual safety does not come from hiding and encrypting what you are doing. Safety comes from having support by the right people. For instance if you are really rich and cheat the tax man there is no problem if the tax office and the news papers don't think about you. Nobody will look.

If you don't believe it just check out the cases that were brought to light. You will find that they are very obvious and not super secret. You will find that someone in a similar position but different company/government actually profits from this "discovery". And you will find that not all cases get punished, just this one case. (think 2008 here, where they literally jailed a single banker and that was it)

Hidden in plain sight, ignored by people who want or need you to succeed. That's how this game works.

Re: Bitcoin is fiat money, too

#233

Post by kijin » Sat, Sep 23, 2017, 7:57 AM UTC

rtpg wrote: post #221

kijin wrote: post #192

Earlier quoted context omitted.

If you're rich enough, you can fly your family and friends out to any tropical paradise whenever you want. No need for you to visit the US unless you have a strong emotional attachment to some specific location.

if you are rich enough you can also just pay taxes and keep a passport that allows visafree travel mostly anywhere and not have to force people to fly to a different country to see you. Its a fun thought experiment for sure but ultimately if you're at the level of wealth that running from the taxman gets you huge gains, either you have other problems (like being some sort of druglord) or you have enough money to also…

Sure, if I had to choose between maintaining a complicated tax avoidance scheme for the rest of my life and just paying taxes, I would probably just pay my taxes and sleep easy.

But it seems that a lot of people disagree. Either you and I are massively underestimating the benefits of tax avoidance, or these people have some sort of knee-jerk reaction to the very concept of taxation that makes them try to avoid taxes even if it involves a lot of hassle. The latter would not be surprising for a diehard libertarian.

Re: Bitcoin is fiat money, too

#234

Post by jpttsn » Sat, Sep 23, 2017, 7:57 AM UTC

Mostly great article. There’s probably a lot of economic history that applies to cryptocurrency.

The fiat part of the title is just FUD. With the same argument, gold bullion would be fiat because a majority of humans could decide they don’t like its shine. Silly Economist.

Re: Bitcoin is fiat money, too

#235

Post by kk58 » Sat, Sep 23, 2017, 8:00 AM UTC

sonink wrote: post #190

Fundamentally, Bitcoin is software eating the Fed-Bank-Retail ecosystem. The Fed governance is replaced by code. The banking utility is replaced by miners. I think the march of bitcoin is actually a better example of how AI is taking over the world. People in AI are fascinated by AGI - but the bitcoin ecosystem is actually a real world example of how AI will take over the world. Specifically, the march of AI won't ha…

I wonder if bitcoin with AI will give embed AI with survival function?

Re: Bitcoin is fiat money, too

#236

Post by pmuk » Sat, Sep 23, 2017, 8:01 AM UTC

Finnucane wrote: post #20

dnautics wrote: post #18

Interestingly the economist misses the traditional definition of Fiat: a currency whose value is determined by the Fiat of a state. Whether or not Bitcoin exhibits similar trends as currency that isn't backed by the state is immaterial to the ethical appeal (to some) of a medium of exchange where participation is voluntary and consensual.

Is Bitcoin actually a medium of exchange? It seems to be functioning more as an investment to be hoarded rather than spent.

It's not very useful as a medium of exchange right now since it requires 197 KWh of energy to confirm a single transaction!

https://digiconomist.net/bitcoin-energy-consumption

Re: Bitcoin is fiat money, too

#237

Post by erikb » Sat, Sep 23, 2017, 8:04 AM UTC

runeks wrote: post #224

> They made transactions easier, and in the process created new deposits and bills that increased the supply of money. This is the fundamental misunderstanding that the whole article is based on, in my opinion. Let me clarify. Gold and silver were money in this time period. Deposits receipts and bills of exchange are neither gold nor silver. They are derivatives, because they derive their value from allegedly being r…

Total misunderstanding imo. A company doesn't default, when it can't uphold its promises. In fact most companies can't uphold their promises most of the time. If that would be true 99% of the companies you know would be dead.

A company defaults when a creditor decides to force the company into default, or a company defaults as punishment to a creditor who really needed the fulfillment of what they are owed but somehow screwed with the company owner.

And companies aren't there to keep it honest. They are there to keep it dishonest. In fact it's not myCorp making a promise to yourCorp. It's me making a promise to you. But piping it through our corps means you can't harm me for not fulfilling the promise. You can only harm my corp. It's taking the punishment part out of deal making. I can promise you anything you want to hear. You can promise me anything I want to hear. And then let's see when our own goals force us to actually deliver on something.

Re: Bitcoin is fiat money, too

#238

Post by wallace_f » Sat, Sep 23, 2017, 8:04 AM UTC

alexasmyths wrote: post #120

SubiculumCode wrote: post #84

"Bankers talk about “governance”, ways to ensure private banks and central bankers make sound decisions—so they create just enough money make commerce easier, but not so much that the system collapses through inflation or panics." Many people don't know that central bankers literally, not figuratively, mean CREATE money out of nothing.

"mean CREATE money out of nothing." No, this is not true. Central banks do 'create' money, but they trade it on the market for real assets. The Fed creates dollars and exchanges them for an equal amount of US Tbills (bought at market rates). $1 created = $1 in Tbills on their balance sheet. They're not just creating money and keeping it, or giving it away. The practice of 'fractional lending' by retail/commercial ban…

Look, this is what the Fed is:

A private bank. It prints a dollar and either: (1)buys a T-Bill with it through the FOMC, or (2) lends it out through the discount window (only to big banks, not to Americans directlt), or since 2008, buys "toxic assets" with it.

How many dollars are printed is decided by unelected technocrats with no public transparency, oversight or accountability.

What the Fed also does is insure the banks because they are for some ungodly reason allowed to lend out over 10x more money than they have (to increase the money supply, econ textbooks say).

There are a lot of people who have said something between 'the Fed is a welfare system for the rich that steals from the poor' to 'it should be ended,' including Bernie Sanders, Milton Friedman, Aaron Schwartz.

In fact during the Civil War Lincoln actually ignored the banks who were all betting against him. He used the a constitutional right to print money through congress and it worked.

In academia, the groupthink around the Fed is strong. Think stronger than Challenger Disaster groupthink. And they're almost all in favor of it.

Re: Bitcoin is fiat money, too

#239

Post by pmuk » Sat, Sep 23, 2017, 8:11 AM UTC

virmundi wrote: post #40

Finnucane wrote: post #20

Earlier quoted context omitted.

Is Bitcoin actually a medium of exchange? It seems to be functioning more as an investment to be hoarded rather than spent.

I wonder if part of this is due to dust. My understanding is that at these prices you don't really want to split a coin for a $.25. As a result it's poor for micro payments and daily macro payments alike.

And there are huge energy costs in performing a transaction... 197 KWh @ $0.10 per KWh = nearly $20 of electricity for 1 transaction.

Re: Bitcoin is fiat money, too

#240

Post by 8973417983461 » Sat, Sep 23, 2017, 8:21 AM UTC

kashkhan wrote: post #194

sonink wrote: post #190

Fundamentally, Bitcoin is software eating the Fed-Bank-Retail ecosystem. The Fed governance is replaced by code. The banking utility is replaced by miners. I think the march of bitcoin is actually a better example of how AI is taking over the world. People in AI are fascinated by AGI - but the bitcoin ecosystem is actually a real world example of how AI will take over the world. Specifically, the march of AI won't ha…

it's great that no government is doing the fiat. That by itself is reason enough.

Let me rephrase this for you: It's great that some Chinese private entrepreneurs (connected with the intelligence services or not) are doing the fiat. That by itself is reason enough.