Earlier quoted context omitted.
No, but if there is an increase in productivity and you don’t print money there will be deflation.
Is deflation an awful situation ?
Ask Japan.
Fiat is Effective: fiat for the crypto crowd [pdf]
181–190 of 275 posts
Re: Fiat is Effective: fiat for the crypto crowd [pdf]
#182Earlier quoted context omitted.
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 busines…
"Do you think the state comptroller could not seize your cryptocoin assets if you refuse to pay your taxes?"
Not by simply helping themselves to my account. They'd have to, like, talk to me first, possibly even use Due Process. That's a huge improvement.
Re: Fiat is Effective: fiat for the crypto crowd [pdf]
#183Earlier quoted context omitted.
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…
Cryptocurrencies would indeed preclude printing money. >that money might simply be borrowed ...but I don't think any cryptocurrency would have any effect on any government's hability to borrow money. What would stop a lender from trading 1 BTC from a note saying "I.O.U. 1 BTC"?
They could still borrow, just not indefinitely the way they do now.
Re: Fiat is Effective: fiat for the crypto crowd [pdf]
#184Earlier quoted context omitted.
>instead of the ecosystem of cryptocurrencies we actually have, which is more like Hayek's proposal for competing privately-issued currencies. That's interesting, it's the first time I hear about this concept. I just barely skimmed a few articles about the concept but I'm not sure how this would solve the problems in TFA. In particular deflation: if I need to invest in a currency why would I even elect to use an infl…
Hayek points out that you wouldn't choose an inflationary currency. He relies on that to limit overall inflation. But you also don't have the deflationary problems of the gold standard, since it's possible to make more money at will if you need it. Regarding payments: suppose we were starting from scratch, with two proposed systems: (1) user signs transactions that authorize transfers with specific recipients and amo…
You're proposing a false dichotomy regarding payments... As if the cryptocurrency way has no flaws and the other is chalk full of them.
If life has taught us anything it is that; Given things of value, people will find a way to defraud, game or otherwise manipulate said items of value.
I am positive that people will abuse or are abusing the cryptosystems to the same extent people abuse fiat given more time.
Re: Fiat is Effective: fiat for the crypto crowd [pdf]
#185Earlier quoted context omitted.
Yes, and with a hardware wallet, opsec is trivial. In my ideal world everyone has one in their leather wallet or on a keychain, and also uses it for secure 2FA on websites.
This is laughable. An investment of $700 ( http://www.gunbroker.com/item/696279983 ) makes content of one's hardware wallet non-recoverable. Right of redress does not help as the transaction is not reversible.
Hardware wallets use a seed to generate key pairs using a cryptographic random number generator. The seed is usually a sequence of words which you backup on a piece of paper.
If the hardware wallet is destroyed you can simply generate the keys again with either a new hardware wallet or a software one.
Re: Fiat is Effective: fiat for the crypto crowd [pdf]
#186For anyone interested in understanding what money is, and the downside of commodity money without a central bank, Allyn Young wrote this[1] in 1924[2]. It talks about the gold standard, bi-metalism and decentralized banking that was taking place in the US in the XIXth century. [1] https://fr.scribd.com/document/251483136/The-Mystery-of-Mone... [2] it's just 11 years after the creation of the Fed. He had a good unders…
Curious; why XIXth century instead of 19th century?
Just me mixing up and applying French conventions in English ;).
Re: Fiat is Effective: fiat for the crypto crowd [pdf]
#187Earlier quoted context omitted.
Yes, and with a hardware wallet, opsec is trivial. In my ideal world everyone has one in their leather wallet or on a keychain, and also uses it for secure 2FA on websites.
This is laughable. An investment of $700 ( http://www.gunbroker.com/item/696279983 ) makes content of one's hardware wallet non-recoverable. Right of redress does not help as the transaction is not reversible.
Read up on hardware wallet passphrases. You can have as many wallets on your hardware wallet as you like, and there's no way to tell how many there are. The hidden funds certainly won't be vulnerable to a fast mugging.
And of course, if you have a large amount of money you probably shouldn't put it on the hardware you carry around anyway. Apply a little common sense and put it in a safe deposit box.
Re: Fiat is Effective: fiat for the crypto crowd [pdf]
#188In 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…
This is the wrong way to look at it.
All functioning currencies are about trust. Both Bitcoin and fiat currency has trust. Bitcoin has more trust than some governments fiat currencies and less than others.
Bitcoin is the first truly international wire transfer system all others are based on contracts between banks in an international network.
It's an international currency with no country or bank owning it. That alone makes it extremely valuable.
Re: Fiat is Effective: fiat for the crypto crowd [pdf]
#189Earlier quoted context omitted.
I think that feature could be summed up as: With criptocurrencies, if your software and opsec are good, you're a lot less vulnerable to identity theft and overcharges.
Yes, and with a hardware wallet, opsec is trivial. In my ideal world everyone has one in their leather wallet or on a keychain, and also uses it for secure 2FA on websites.
You're trusting your hardware provider similarly to how I trust my bank.
They need to opt out of attacking you, and prevent rogue employees and suppliers from being able to attack you.
Re: Fiat is Effective: fiat for the crypto crowd [pdf]
#190Earlier quoted context omitted.
Hayek points out that you wouldn't choose an inflationary currency. He relies on that to limit overall inflation. But you also don't have the deflationary problems of the gold standard, since it's possible to make more money at will if you need it. Regarding payments: suppose we were starting from scratch, with two proposed systems: (1) user signs transactions that authorize transfers with specific recipients and amo…
You're proposing a false dichotomy regarding payments... As if the cryptocurrency way has no flaws and the other is chalk full of them. If life has taught us anything it is that; Given things of value, people will find a way to defraud, game or otherwise manipulate said items of value. I am positive that people will abuse or are abusing the cryptosystems to the same extent people abuse fiat given more time.
I'm not saying that at all, and fiat payment security is improving. But the very fact that it's able to improve implies that some systems are more secure than others.