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

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

#211

Post by moduspol » Mon, Oct 16, 2017, 6:02 PM UTC

emiliobumachar wrote: post #208

moduspol wrote: post #183

Earlier quoted context omitted.

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.

To whom do they sell the IOUs?

There's a limited number of Bitcoin in existence, and with each one you buy (issuing an IOU in return), the price goes up and people doubt your ability to pay back more and more.

This is almost exactly what's happening with Puerto Rico's debt crisis [1]. They've sold a bunch of bonds, were downgraded to "junk status" in 2014, and then defaulted on a bunch of them in 2015. Eventually you have to face the music and cannot borrow any more.

[1] https://en.wikipedia.org/wiki/Puerto_Rican_government-debt_c...

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

#212

Post by AgentME » Mon, Oct 16, 2017, 6:02 PM UTC

golangnews wrote: post #147

apo wrote: post #105

Earlier quoted context omitted.

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…

civil asset forfeiture, capital controls Bitcoin offers no special protection against this. Your problems would arrive in the real world with guns. See shutdown of exchanges in China. Black market trading If your opsec is perfect, maybe. See Ross Ulbricht. intense privacy invasion by governments Bitcoin keeps a public record of every transaction, forever. That is trivial to tie to your real world activity, in retrosp…

>If your opsec is perfect, maybe. See Ross Ulbricht.

The bar is so much lower than many think. Ulbricht posted the first advertisements of Silk Road with accounts publicly linked to his personal email address.

>Bitcoin keeps a public record of every transaction, forever. That is trivial to tie to your real world activity, in retrospect. It has not been important enough to do yet, but the data is there and data is already collected on other selectors linked to all online activity.

Privacy isn't automatic in bitcoin, but it's easy enough in practice to break the public link in the blockchain. Depositing into an exchange account or other bitcoin service and then withdrawing a few days later is usually enough. If you want privacy from the exchange too, then exchanging bitcoin for a cryptocurrency with anonymity built-in (ie. monero or zcash), and then exchange that back to bitcoin at an exchange that doesn't require user identification. (Alternatively, convince your intended recipients to accept monero/zcash directly and don't even bother with bitcoin.) (It's possible that in the future, the Lightning Network functionality for Bitcoin will add some anonymity as a byproduct to transactions using it.)

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

#213

Post by simias » Mon, Oct 16, 2017, 6:03 PM UTC

rothbardrand wrote: post #196

simias wrote: post #192

Earlier quoted context omitted.

>suppose we were starting from scratch "What-ifs" are always an interesting game but practically we're veeeery far from starting from scratch with the economy. But okay, I'll play. >user signs transactions that authorize transfers with specific recipients and amounts Great, but you've only secured one tiny part of the "earn money/spend money" loop. What if the service/goods you buy turns out to be a scam or something…

That's not the whole argument, by a long shot. The dollar has lost %99.99 of its value, and in my opinion has had %100 inflation in the past 10 years (not each year but over the decade) so is effectively half as valuable again. This is theft from the people. Even Keynes recognized this. Bitcoin is an exit from that system. It has lot of other features like the ability to send money across borders which is harder to s…

TFA points out that it's true that the dollar lost 99% of its value over the last century. "However, if you held your money in anything interest-bearing, including short-term Treasury bills with no-credit-risk, you’ve at least almost doubled the purchasing power of your money!"

I'm not sure I agree with the argument that inflation is theft from the people, or at least we have to define what's "the people". Poor people who earn their salary and spend most of it within the month are not really victims of the inflation unless their wage doesn't increase proportionately with the inflation year after year. And while it's not a perfect match, salaries now are definitely not what they were in 1920. A quick google gives the average salary in 1920 at $1236 although I can't seem to find a decent source for that. Clearly the workforce's purchasing power did not collapse during the past century.

"The people" who are losing money are wealthy folks (or "whales" in bitcoin parlance) who hold onto huge amounts of currency. Those would've lost 99% of their fortune if they kept dollars in their mattress for a century. So what should they do instead? Invest that money to fuel the economy.

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

#214

Post by mattbeckman » Mon, Oct 16, 2017, 6:10 PM UTC

strgrd wrote: post #206

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 ineffect…

"pls buy litecoin"

... there's always a vested interest!

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

#215

Post by golangnews » Mon, Oct 16, 2017, 6:16 PM UTC

AgentME wrote: post #212

golangnews wrote: post #147

Earlier quoted context omitted.

civil asset forfeiture, capital controls Bitcoin offers no special protection against this. Your problems would arrive in the real world with guns. See shutdown of exchanges in China. Black market trading If your opsec is perfect, maybe. See Ross Ulbricht. intense privacy invasion by governments Bitcoin keeps a public record of every transaction, forever. That is trivial to tie to your real world activity, in retrosp…

>If your opsec is perfect, maybe. See Ross Ulbricht. The bar is so much lower than many think. Ulbricht posted the first advertisements of Silk Road with accounts publicly linked to his personal email address. >Bitcoin keeps a public record of every transaction, forever. That is trivial to tie to your real world activity, in retrospect. It has not been important enough to do yet, but the data is there and data is alr…

Against a state (the ones who impose capital controls etc) every contact with the bitcoin network would give you away. It’s not really designed for privacy and even networks that are like tor have been subverted. You can’t hide from a sufficiently determined state without continuous & extraordinary efforts.

If you're willing to live outside the law, bitcoin could help you do so (with difficulty). If you want to live normally, it can't help you. So I guess I'm trying to say - change the law, not the tech.

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

#216

Post by bernadus_edwin » Mon, Oct 16, 2017, 6:19 PM UTC

strgrd wrote: post #206

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 ineffect…

Wow. There is a twist at the end

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

#217

Post by jackstraw14 » Mon, Oct 16, 2017, 6:20 PM UTC

mattbeckman wrote: post #214

strgrd wrote: post #206

Earlier quoted context omitted.

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 ineffect…

"pls buy litecoin" ... there's always a vested interest!

Maybe at some point people will do some thinking about how their own conflicts of interest affect the hype and FUD they spread in crypto communities.

pls buy iota

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

#218

Post by jondubois » Mon, Oct 16, 2017, 6:21 PM UTC

strgrd wrote: post #206

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 ineffect…

Yes, it seems that human attention has become the ultimate luxury commodity. I think that a cryptocurrency derives a significant portion of its value from the mere fact that that a lot of people know about its existence.

A lot of celebrities these days make huge sums of money in spite of being untalented. Being famous is valuable in itself.

People (especially rich people) want to be loved and/or respected. The "why" doesn't actually matter. If you own a lot of something which a lot of people know about, then you will be respected.

The blockchain is public. Everybody can see it. It's the ultimate instrument of vanity. In the future you'll be able to show off your wealth without the stigma associated with actually showing it off. People will be able to look you up on a popular blockchain and know that you are an influential individual.

It solves a big problem that rich people have. They want to appear humble but at the same time they want other people to know that they are rich.

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

#219

Post by amyjess » Mon, Oct 16, 2017, 6:26 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…

> 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 it's inflammatory rhetoric filled with hyperbole and straight-up falsehoods like this that puts the bulk of the population off of Bitcoin.

> and all the features of bitcoin which are increased privacy, better control over your funds, better security, etc.

The history of the Bitcoin community, so far, can best be described as "libertarians learn step-by-step why financial regulations are necessary".

The boom-bust cycle, exchanges closing down and running away with their customers' money, etc., are things that modern financial regulations exist to prevent (or at least should; see how the repeal of Glass-Steagall led to the 2008 Financial Crisis). With a few exceptions, the financial system regulated these problems away in the 1930s. There's no fraud protection with Bitcoin, either. If you pay Bitcoin for something and the seller takes the money and runs without shipping your product, you're screwed. With a credit card, I can call my bank and have them execute a chargeback.

I think what we're going to find is that privacy is incompatible with stability or consumer protection, and when push comes to shove, the general population is going to side with stability and consumer protection.

And just wait until every last Bitcoin has been mined and the supply will never again grow with the population. The Bitcoin community will learn why hyperdeflation is bad.

And that's assuming the federal government doesn't just ban Bitcoin and call it drug paraphernalia as an excuse.

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

#220

Post by jezclaremurugan » Mon, Oct 16, 2017, 6:31 PM UTC

subroutine wrote: post #150

jezclaremurugan wrote: post #136

Earlier quoted context omitted.

Its more of a global currency than a US specific one. Speaking from my experience - moving large amounts of money as a student or as someone who wants to send money back home across international borders when one starts earning becomes a pain when it comes to transaction charges, and international payment charges on credit cards etc. Cryptocurrencies can replace USD as a global currency when it gains enough users acr…

Can you not avoid fees by using paypal or venmo for example? I transfer money to my friends and family all the time with no fee using these existing services.

Paypal has a fee for international transfer - and they also don't cover India. Same for venmo.