341–350 of 355 posts
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> Same can be said of every technology. Can that technology double number of dollars in the world right now?
No, but the Federal Reserve can.
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It's not about need. If it is profitable to mine, professional miners will exist. You can't create an incentive structure and then call it a "bug" when somebody optimizes for it.
So you can create a disincentive for non-user mining. What would be the downside? This is supposed to be a distributed system.
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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.
You clearly have no idea how money is "created" or how the Federal Reserve works.
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So you can create a disincentive for non-user mining. What would be the downside? This is supposed to be a distributed system.
What kind of discouragement do you have in mind?
The Tor Network, for example, has mechanisms for excluding bad participants. There's the bad exit flag, for relays that snoop traffic. Relays that harvest onion hostnames get banned. So do relays that attempt traffic analysis.
There's even a policy of discouraging new relays in commonly-used AS. There's no exclusion mechanism. But I don't see why there couldn't be, if there were too much concentration.
Edit: See https://trac.torproject.org/projects/tor/wiki/doc/ReportingB...
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Ethereum's upcoming Proof of Stake mechanism is supposed to put more power into the hands of investors compared to miners.
That doesn't really help. Early adopters get huge sums of ETH compared to those who join after the price rises. The distribution of coins is massively unequal.
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…
Bitcoin can easily be stopped by governments, at least in countries that are not failed states. All they have to do is declare it illegal, and enforce the law. It would be trivial for them to shut down exchanges. Without that, it would hard, and expensive, to convert to fiat. Legit businesses would not accept Bitcoin. The only uses would be black market, and I doubt they would continue using bitcoin on the darknet ma…
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And that’s why the fed ensures we have a mildly inflationary currency. If it deflated spending would drop, cutting the velocity of money, and cutting out economic growth.
"If it deflated spending would drop" That statements not a given. If it were so, people would not use credit cards.
Bitcoin is not fiat. Fiat means "by decree" or "by authority". Fiat money is money that is decreed into existence by some authority, that is, the government. This is done through legal tender laws. Bitcoin is not created by the enactment of some law by some authority. Fiat does not mean "by consensus", or "by mathematics". Saying code is decree, and therefor fiat, is sloppy thinking. Bitcoin may have much in common w…
It's -- you know -- an element of literary style.
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"Distilled to its roots, the Fed has been manufacturing “savings” from thin air for the better part of a decade. When the financial crisis hit in 2008, American savings were depleted, so the Fed had to step in to produce savings (to finance huge government deficits). Now the Fed is attempting to remove that “savings” at a time when: 1) The private sector is experiencing falling savings. 2) The government is likely on…
Why can't the fed just hold onto said toxic assets indefinitely?
I'm already over simplifying, but here is a less abstract illustration: Imagine you lose your job and you need some money to get back on your feet. You borrow against a line of credit to cover living expenses. You find another job but it doesn't pay enough to cover your standard of living, so you keep the line of credit open and just make the minimum payments. You are the US economy and the line of credit is the FED right now. If the line of credit is not paid off, if you lose your job again, there will be nothing to borrow against or even make the minimum payments. The smart thing to do is pay off the credit card balance so you can use it again if you're in trouble. The problem is you can't do that unless you cut back on spending... and this is why the FED always points out that the control of the situation is not with the FED but with congress, they need to cut spending...
And I didn't even address your exact point. This is just the "non-toxic treasuries". The toxic stuff is non performing home loans. Imagine trying to sell those back to someone! Are you willing to buy them?
More info here: https://www.newyorkfed.org/markets/mbs_faq.html
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It doesn't work at all without the peer network. However, you might be able to construct an "IOU" of sorts by creating a signed transaction offline, to be fed to the network later. (I'm not 100% sure whether anti-replay features make this impractical.)
> However, you might be able to construct an "IOU" of sorts by creating a signed transaction offline, to be fed to the network later. And if you grant the holder of that IOU the sole right to print and distribute notes representing subdivisions of that debt, you’ll find yourself back at cash!