Fiat is Effective: fiat for the crypto crowd [pdf] • Hacker News Board

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

#201

Post by DennisP » Mon, Oct 16, 2017, 5:32 PM UTC

notyourday wrote: post #194

DennisP wrote: post #187

Earlier quoted context omitted.

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.

Oh no, your attacker will point a Desert Eagle at your head and you will unlock all your wallets. After the money is transferred you won't be able to recover it. The reason why currency in current form is so interesting is that it is not easy to move massive amounts currency into a form that can be easily consumed. Even uncut diamonds is a small market so in event crime happens the proceeds of crime will likely be re…

The attacker would need to spend significant time on that. It'd work in a home invasion, but street muggings are over fast. And again, safe deposit box for large amounts, spendable money in the portable. With a simple smart contract you don't even need to go to the bank to refresh small amounts every few days.

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

#202

Post by AgentME » Mon, Oct 16, 2017, 5:40 PM UTC

emiliobumachar wrote: post #189

DennisP wrote: post #177

Earlier 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.

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.

If my bank was open source, modifiable, and runnable in a private instance on my own hardware, I might trust banks more. (Ignore that it might not be right to call it a bank at that point...)

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

#203

Post by pdkl95 » Mon, Oct 16, 2017, 5:40 PM UTC

DennisP wrote: post #175

simias wrote: post #163

Earlier 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 wouldn't choose an inflationary currency.

Inflation only hurts people that hold non-trivial amounts of that asset. Most people benefit from inflation as it makes their debts easier to pay.

However, it's foolish to assume most people make make such choices rationally. People would choose currencies based on popularity and/or whatever they heard on TV.

> I can't imagine anyone choosing the second option.

"Signing transactions and having to authorize every transfer sounds like a lot of work. Bank $FOO will handle all that for me, for 'free' if I open a new account before $DATE."

edit:

Sure, the ability to use proper user-controlled, signed/authenticated transactions would be wonderful, regardless of the currency.

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

#204

Post by a_c_s » Mon, Oct 16, 2017, 5:42 PM UTC

irln wrote: post #100

subroutine wrote: post #70

Earlier quoted context omitted.

What do you think the Fed was attempting to do? Or let me put it another way - it sounds like you are advocating there be no way for an agency of a democratic government to dynamically adjust money supply (or interest rates). Say we went all-in on crypto and 10-years-in for whatever reason the crypto supply generation rate we set a decade ago wasnt working (the US economy was crumbling). What then? This is an honest…

Not advocating for or against the fed or advocating for or against crypto currency but instead attempting to answer your three main questions. > What do you think the Fed was attempting to do? The Fed was attempting to save a system from complete collapse. > it sounds like you are advocating there be no way for an agency of a democratic government to dynamically adjust money supply (or interest rates) This is the cru…

> management of the supply of that currency that is equitable to all participants remains illusive

The interests of participants are mutually exclusive: debtors want high inflation, lenders want deflation.

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

#205

Post by AgentME » Mon, Oct 16, 2017, 5:45 PM UTC

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…

Why do many people (including bitcoin fans) assume that bitcoin must replace the world's currencies to be successful? Does anyone judge PayPal on that metric? I just think bitcoin can fill PayPal's niche in a more open decentralized way.

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

#206

Post by strgrd » Mon, Oct 16, 2017, 5:46 PM UTC

rothbardrand wrote: post #200

These arguments against bitcoin have been the same since 2010. They seem to ignore the point of bitcoin (it is impossible to counterfeit, unlike fiat which is counterfeited as a matter of course by the central bank to pay the federal government so it can buy bombs).... and all the features of bitcoin which are increased privacy, better control over your funds, better security, etc. At any rate, the past 7 years has s…

Bitcoin isn't the internet of money, it is an internet for money. With this distinction in mind, it would be foolish to think that the first cryptocurrency would be the last. It took many implementations and iterations of wide area networks to arrive at the Internet Protocol we have today.

While Bitcoin doesn't share the same set of problems as fiat currency, it has its own burdens, and has proven completely ineffective as a functional money system outside of speculation and fraud. The novelty of Bitcoin is supposedly its 'immutable ledger', a phrase used so frequently in defending Bitcoin, that it has become divorced from its meaning, and divorced from the reality that solutions to distributed logging existed long before Bitcoin, and many more solutions to this problem will be developed with no regard to the blockchain.

Bitcoin itself will never replace anything -- cryptocurrencies will remain monolithic in purpose and function for a very long time. The underlying ideas to the Bitcoin protocol will be iterated on, and we'll see these ideas implemented in distributed software, but to incessantly hype Bitcoin as the singular platform for cryptocurrency is to live in a bubble.

pls buy litecoin

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

#207

Post by adventured » Mon, Oct 16, 2017, 5:48 PM UTC

rothbardrand wrote: post #200

These arguments against bitcoin have been the same since 2010. They seem to ignore the point of bitcoin (it is impossible to counterfeit, unlike fiat which is counterfeited as a matter of course by the central bank to pay the federal government so it can buy bombs).... and all the features of bitcoin which are increased privacy, better control over your funds, better security, etc. At any rate, the past 7 years has s…

> unlike fiat which is counterfeited as a matter of course by the central bank to pay the federal government so it can buy bombs

While I agree with your underlying premise, you're comically off mark in your criticism. Fiat (in this case we're obviously talking about the US Dollar) is mostly counterfeited by the US Government to buy votes, pay for welfare programs, shore up hemorrhaging entitlement programs, and to pay military salaries & benefits (the vast majority of military expenditures).

Bombs are a low single digital factor in the dollar debasement party from the last ~45 years.

The US budget deficit is approaching such a permanently large scale in non-recession years, that you could wipe out the entire US military and not balance the budget, while still running a real deficit on needed spending for things like infrastructure, Social Security, healthcare, et al.

Bomb (weapons) expenditures are near the bottom of financial concerns. The US has a massive, system-wide cost imbalance on nearly everything (all entitlement programs, all healthcare programs, all infrastructure programs, all education). In government we spend more and get less, on basically everything vs other developed nations.

Want to slash $300 billion out of the military? Ok. In ten years, we'll still have a $600+ billion perpetual budget deficit just due to ballooning entitlement programs alone (and about $27-$30 trillion in public debt at that point, most of which didn't come from bombs either).

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

#208

Post by emiliobumachar » Mon, Oct 16, 2017, 5:49 PM UTC

moduspol wrote: post #183

emiliobumachar wrote: post #158

Earlier quoted context omitted.

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.

How come? Now, they just sell more I.O.U.s to pay the ones that reach the due date. They could do exactly the same in BTC, gold, tulips, or whatever.

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

#209

Post by gersh » Mon, Oct 16, 2017, 5:49 PM UTC

DennisP wrote: post #177

emiliobumachar wrote: post #160

Earlier 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.

What happens when you lose your wallet, or someone steals the peace of paper with your private key? Credit cards and atms get stolen all the time.

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

#210

Post by subroutine » Mon, Oct 16, 2017, 5:55 PM UTC

AgentME wrote: post #205

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…

Why do many people (including bitcoin fans) assume that bitcoin must replace the world's currencies to be successful? Does anyone judge PayPal on that metric? I just think bitcoin can fill PayPal's niche in a more open decentralized way.

100% agree!

How would this work in practice? Naturally you would need a free/open/secure mobile app (maybe such an app exists already?). Is there a way to hold and transfer fractions of bitcoin without using exchanges? Can I purchase fractions of coin from exchanges and transfer those fractions into my personal wallet?