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Fiat is Effective: fiat for the crypto crowd [pdf]

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Re: Fiat is Effective: fiat for the crypto crowd [pdf]

#121

Post by acdha »

Spivak wrote: post #111
lightbyte wrote: post #108

Earlier quoted context omitted.

>- civil asset forfeiture; How would cryptocurrencies prevent the police from seizing your private keys? They can already throw you in jail if you refuse to provide passwords, or the keys themselves.

Current situation: Government takes your money and you must sue to get it back. Crypto: Government is incapable of taking your money and must prosecute in order to coerce you to turn it over. And you could still refuse and accept your jail time. Edit: People replying to me are missing the point. This is about the case where the government is wrongfully taking your money. Under the current system your money can be sei…

That assumes that you have perfect key management. Looking at current cases about phone & other device searches suggest that most people would be compromised.

This also forces other issues: e.g. offline wallets are a standard answer to security concerns but those are more vulnerable to physical compromise. This scenario needs a lot more discussion of threat models.

Re: Fiat is Effective: fiat for the crypto crowd [pdf]

#122

Post by annabellish »

apo wrote: post #105
subroutine wrote: post #64

In the words of Patrick McKenzie's tweet linking to this pdf‏, "Hey look, someone took the time to explain to cryptocurrency enthusiasts why the rest of us perceive money as working". For those singing the praises of cryptocurrency I pose this question: Say the United States decides to allow decentralized cryptocurrencies to become the dominant medium of exchange in the US; say it even gets rid of the $USD. What prob…

Hey look, someone took the time to explain to cryptocurrency enthusiasts why the rest of us perceive money as working. Most knowledgeable cryto enthusiasts I know already know that fiat currencies work well enough for many people. Folks like McKenzie will see no value in Bitcoin and other cryptos because their money needs are already satisfied. Good for them, but their narrow perspective excludes many valid use cases…

Bitcoin does not solve 2, 3, 4, or 5!

You have a job, so you get wages. These wages are sent to a bitcoin address. Now your employer can track every transaction you make. There's no reason why this would not also have to be reported for tax reasons, so your government can also track every transaction you make. You buy something, now that company can have a decent chance of tracking your spending too!

There are ways around these issues, but nothing _straightforward_ or scalable. Not everyone can or will use a tumbler for all their wages.

Re: Fiat is Effective: fiat for the crypto crowd [pdf]

#123

Post by neilwilson »

pjc50 wrote: post #28
nadam wrote: post #25

Earlier quoted context omitted.

"This sentence sounds like preaching." Yes, you are right, I was wondering whether to edit that sentence to sound less confident. :) I have no evidence, and I am not an expert on this. I just think that if a currency is a utility currency, actually used by merchants and everyday users globally across a wide range of industries, countries and people, it has a huge market cap (it is the dominant currency of the world):…

The expansion and contraction of the real economy causes a change in the demand for money , resulting in changes in the price level. This is usually summarised in the equation "MV=PQ"; see the economics literature for more detail on this. (This is independent of what the money actually is, and was a big problem with price fluctuations under the gold standard)

The economics literature is wrong. The quantity theory of money is cobblers - or rather the mainstream assumptions are.

https://www.forbes.com/sites/johntharvey/2011/05/14/money-gr...

Re: Fiat is Effective: fiat for the crypto crowd [pdf]

#124

Post by neilwilson »

paulgb wrote: post #44
neilwilson wrote: post #41

Steve has missed the main point. The value of a currency is determined by the effort required to obtain it.

That's not its value, just an upper bound on its value. If you disagree, boy do I have some currency to sell you. I worked very hard on it, I swear! :)

And the lower bound is the tax I have to pay in it.

I need 100 of your currency, here's a small caraway seed for it.

Now shall we negotiate?

Re: Fiat is Effective: fiat for the crypto crowd [pdf]

#125

Post by Laforet »

S410520 wrote: post #104

IS it not deflationary? 2015: Block reward: 25 btc * 6 blocks per hour * 24 hrs* ~250 euro = 900.000 euro worth of daily mined supply 2017: 12.5 btc * 6 blocks * 24 * ~2000 euro = 3.6 Million

Indeed, prior to 2015 it had double digit inflation, thought this has declined to just under 3% per year and will continue to fall.

Morever, some estimates suggest up to 1/3 of all BTC are unspendable (lost keys, malformed txns, minute dust UTXOs, etc) so the deflationary spiral could have already been under way.

Re: Fiat is Effective: fiat for the crypto crowd [pdf]

#126

Post by _Codemonkeyism »

sp4ke wrote: post #77
subroutine wrote: post #64

In the words of Patrick McKenzie's tweet linking to this pdf‏, "Hey look, someone took the time to explain to cryptocurrency enthusiasts why the rest of us perceive money as working". For those singing the praises of cryptocurrency I pose this question: Say the United States decides to allow decentralized cryptocurrencies to become the dominant medium of exchange in the US; say it even gets rid of the $USD. What prob…

Patrick McKenzie is fortunate enough to not be born in a country that is currently suffering from hyper-inflation neither is he living under a dictatorship that is putting capital controls and deciding how he should use his hard earned money .... yet :) In other words, "the rest of us" of Patrick's folks do not represent the people for whom crypto is a necessity and not a luxury. So if money is already working for yo…

How would a dictatorship allow stores to accept Bitcoin? If you order from abroad, how would a dictatorship not open and track parcels?

You can use Bitcoins on a black market for illegal goods in a dictatorship, as you can use Bitcoins for illegal goods in a democracy.

Re: Fiat is Effective: fiat for the crypto crowd [pdf]

#127

Post by jameskegel »

Laforet wrote: post #120
Spivak wrote: post #111

Earlier quoted context omitted.

Current situation: Government takes your money and you must sue to get it back. Crypto: Government is incapable of taking your money and must prosecute in order to coerce you to turn it over. And you could still refuse and accept your jail time. Edit: People replying to me are missing the point. This is about the case where the government is wrongfully taking your money. Under the current system your money can be sei…

Civil forfeiture is not limited to cash money. Your lambo car, mansion house or any other property could be seized just as easily under the current regime. In case of crypto, the storage media containing the private keys could be seized. Failing that, the government can always obtain an injunction to blacklist your addresses to exchanges, nodes and miners as long as those operate within their jurisdiction. You could…

These days, most of us use an exceedingly long 25 word mnemonic key; also, look into actually fungible currencies like Monero, where transactions are private by default, with the option to decrypt them for a regulatory body.

Re: Fiat is Effective: fiat for the crypto crowd [pdf]

#128

Post by nwah1 »

moduspol wrote: post #117
subroutine wrote: post #64

In the words of Patrick McKenzie's tweet linking to this pdf‏, "Hey look, someone took the time to explain to cryptocurrency enthusiasts why the rest of us perceive money as working". For those singing the praises of cryptocurrency I pose this question: Say the United States decides to allow decentralized cryptocurrencies to become the dominant medium of exchange in the US; say it even gets rid of the $USD. What prob…

Well, whether or not it's a problem depends on who you're asking, but: Remember in the first Captain America movie when his first role in the military was on a tour raising money for the war? That was actually a thing at that point in time. You had to actually convince people to invest or give money to fund a war. The USD was tied to gold in the real world and they couldn't just create more. Nowadays, we don't have t…

But you are asking a sovereign authority, with few restrictions in terms of monetary policy, to voluntarily restrict itself for no benefit.

Re: Fiat is Effective: fiat for the crypto crowd [pdf]

#129

Post by subroutine »

wyager wrote: post #94
subroutine wrote: post #64

In the words of Patrick McKenzie's tweet linking to this pdf‏, "Hey look, someone took the time to explain to cryptocurrency enthusiasts why the rest of us perceive money as working". For those singing the praises of cryptocurrency I pose this question: Say the United States decides to allow decentralized cryptocurrencies to become the dominant medium of exchange in the US; say it even gets rid of the $USD. What prob…

The USD is probably the most well-behaved fiat currency of the last century, so that’s basically the least interesting example, but: USD is inflationary. Ceteris paribus, a rational actor would generally prefer to hold something deflationary. The (epsilon-) no-arbitrage argument suggests that the frequently raised “but then no one will ever invest in things” objection doesn’t actually make any sense. USD is highly co…

It's difficult to evaluate whether crypto would have mitigated your situation without knowing the details. Why were you charged legal fees by Wells Fargo?

Do you think the state comptroller could not seize your cryptocoin assets if you refuse to pay your taxes?

I'm with you, reasonable Bitcoin supporters should not want to get rid of USD. I personally think of Bitcoin like having a Paypal account, except less businesses accept it, and after dinner when we get the check none of my friends have ever said "hey do you have the bitcoin app on your phone". Maybe that will change soon.

Re: Fiat is Effective: fiat for the crypto crowd [pdf]

#130

Post by miketery »

jbrun wrote: post #85
urza wrote: post #19

So the argument basically comes down to that crypto is too volatile and not usable as unit of account? 1. Crypto is still in its initial stage, where capital is flowing into it. Once it is there, it will be less volatile. You can already see this in Bitcoin[1], where relative volatility is dropping every year. 2. There are projects coming that will enable decentralized trustless peg of fiat currencies into blockchian…

No, that is not at all the argument. The argument is that you cannot have an economy run on a deflationary currency, which bitcoin is. An effective economy requires a bit of inflation and the ability to issue new money when necessary for socio-political reasons. Crypto currencies are a cult, though the underlying tech is interesting.

What if they fork it? I agree with your main point though.
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