The Guns of Bitcoin (2017) • Hacker News Board

Re: The Guns of Bitcoin (2017)

#31

Post by dash2 » Tue, Jul 21, 2020, 6:25 PM UTC

NetWorth16254 wrote: post #27

seibelj wrote: post #3

> What makes dollars valuable is that the government wants them back. Very common misconception. Dollars have value because there is demand for them (governments, other governments, other people and institutions). Bitcoin also has value because there is demand for it. As does your house, expensive art, etc. Why does anything have value? Because someone else will pay your for it. I can say my pencil is worth $1 billio…

Actually you wrong. Dolar has value, because even if no one will want dollar, government will buy it for dollar. It backed on government promise.

Not sure if this is a joke? What does it mean to say the government will buy a dollar for a dollar?

Re: The Guns of Bitcoin (2017)

#32

Post by Proven » Tue, Jul 21, 2020, 6:27 PM UTC

scottmsul wrote: post #18

What's going to stop me from using bitcoin for everything, and then exchanging some into dollars at the last second to pay my taxes?

Nothing, but everyone quickly figures out they would be better off if they exchanged BTC for USD (or other national currency) before tax season when almost everyone must sell BTC for USD.

Re: The Guns of Bitcoin (2017)

#33

Post by xerxesaa » Tue, Jul 21, 2020, 6:27 PM UTC

NetWorth16254 wrote: post #27

seibelj wrote: post #3

> What makes dollars valuable is that the government wants them back. Very common misconception. Dollars have value because there is demand for them (governments, other governments, other people and institutions). Bitcoin also has value because there is demand for it. As does your house, expensive art, etc. Why does anything have value? Because someone else will pay your for it. I can say my pencil is worth $1 billio…

Actually you wrong. Dolar has value, because even if no one will want dollar, government will buy it for dollar. It backed on government promise.

Your argument sounds recursive. What does it mean to say the government will buy a dollar for a dollar? A dollar is only useful if it can be exchanged for things other than itself.

Re: The Guns of Bitcoin (2017)

#34

Post by munk-a » Tue, Jul 21, 2020, 6:28 PM UTC

NetWorth16254 wrote: post #27

seibelj wrote: post #3

> What makes dollars valuable is that the government wants them back. Very common misconception. Dollars have value because there is demand for them (governments, other governments, other people and institutions). Bitcoin also has value because there is demand for it. As does your house, expensive art, etc. Why does anything have value? Because someone else will pay your for it. I can say my pencil is worth $1 billio…

Actually you wrong. Dolar has value, because even if no one will want dollar, government will buy it for dollar. It backed on government promise.

That guarantee is sort of like the spark plug of the economy - because it exists (and because the US government was a thing) people initially believe in the value of a dollar (and the same thing happened with every currency) but the currency continues to have value (and has a value exceeding that initial US valuation) because other people will buy it as well.

Also, just for a moment, the statement: "Dollar has value, because even if no one will want dollar, government will buy it for dollar." - that's a fair bit of nonsense, outside of the dollar having an exchange value the dollar has no value - fiat currency (and even precious metals TBH) only have value to to the continued demand for them and if that demand falters or if people stop valuing a dollar at as many whoppers as it used to be valued - then bad things start to happen really fast and the government is pretty powerless to stop it once it starts.

Re: The Guns of Bitcoin (2017)

#35

Post by null0pointer » Tue, Jul 21, 2020, 6:30 PM UTC

scottmsul wrote: post #18

What's going to stop me from using bitcoin for everything, and then exchanging some into dollars at the last second to pay my taxes?

Nothing, really. Except that it would be a taxation nightmare, since every time you spend some you need to report the difference in price between when you acquired it and when you spent it, and pay tax on the gain/loss. It would also be a lot of effort to find people willing to accept bitcoin for things like groceries.

Re: The Guns of Bitcoin (2017)

#36

Post by shobith » Tue, Jul 21, 2020, 6:32 PM UTC

coinward wrote: post #24

louwrentius wrote: post #9

I would like to see a total ban/block of any kind of cryptocurrency articles on HN. I'm happy to include my own, if that's what it takes. https://louwrentius.com/cryptocurrencies-are-detrimental-to-...

you want to censor discussion around a promising technology. why?

I guess you can make a case for the neo-luddites

Re: The Guns of Bitcoin (2017)

#37

Post by clarkmoody » Tue, Jul 21, 2020, 6:33 PM UTC

seibelj wrote: post #3

> What makes dollars valuable is that the government wants them back. Very common misconception. Dollars have value because there is demand for them (governments, other governments, other people and institutions). Bitcoin also has value because there is demand for it. As does your house, expensive art, etc. Why does anything have value? Because someone else will pay your for it. I can say my pencil is worth $1 billio…

Specifically, "reserve demand." People and institutions demand to hold a positive balance of the monetary good, and the aggregate sum of these reserve demands set the purchasing power.

The notion that fiat money has value because governments demand it in taxes, might set a non-zero value for the money, but it does not set a specific price level.

For instance, I could make a trade for dollars at the exact moment that I pay taxes, and it wouldn't matter what the actual value of the dollars is at that point. I would hold the dollars long enough to pay the taxes but no longer, so my reserve demand for the dollars is minimal. The effect on my finances is exactly the same if one dollar buys a pair of leather boots or a single shoelace.

So: positive value, but no specific purchasing power.

Re: The Guns of Bitcoin (2017)

#38

Post by Acrobatic_Road » Tue, Jul 21, 2020, 6:34 PM UTC

I think the guns of bitcoin are it's decentralized design backed by the lobbying of domestic forces (The EFF, ACLU, exchanges, etc)

Re: The Guns of Bitcoin (2017)

#39

Post by rlucas » Tue, Jul 21, 2020, 6:37 PM UTC

coinward wrote: post #23

full decentralization and seizure-resistance work as good guns against state tyranny

That is orthogonal to the point of the article.

The state can demand, using their guns, that you pay them in the coin of their realm.

At that point, you need to come up with those coins, or face their guns.

You can have your BTC be decentralized and seizure-resistant at that point, but that will not stop the Leviathan from jailing or killing you. The "guns" of the article are the actual guns of the IRS.

Re: The Guns of Bitcoin (2017)

#40

Post by munk-a » Tue, Jul 21, 2020, 6:38 PM UTC

monokh wrote: post #17

The common mistake is to try to compare Bitcoin to a predefined experience of money. Bitcoin's value is multifaceted. From a very simplistic perspective, it can be compared to gold. Things get more interesting when you value aspects such as it being: - Fully digital - Verifiable by the common individual - Sent and received with no interference from third parties - Free from supply emission increases or control Each o…

Gold is a very good comparison (especially since it is inherently pretty worthless much like bitcoins) but I think the core currency quality it has is the limit of supply. One of the more amusing qualities of the fallout world to me was always the usage of bottle caps as a currency. Oh sure we have a pretty much infinite supply now but in a post-war setting it's a relatively common material (we don't use rhodium for currency because it's rare in absolute terms and also very hard to come by) that isn't going to increase in volume - that said more recent games have under cut that with the sheer commonality of nuka cola, and it also seems like a rather easy currency to forge per the volume it takes to transact an exchange.

The other points you mentioned are what's really interesting to me, the verifiable property is one that physical currency has struggled with for a long term and the ledger aspect has no equivalence in physical currency exchange[1] - it's really neat!

1. Except, of course, for my most favorite currency ever the Rai stones https://en.wikipedia.org/wiki/Rai_stones which are essentially a built-in fiat currency that no one ever actually counts or carries but instead the ownership was/is tracked entirely by oral history which is amazing.