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MasterCard to open up network to cryptocurrencies

reuters.com

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Re: MasterCard to open up network to cryptocurrencies

#581

Post by edgyquant »

vntok wrote: post #326
edgyquant wrote: post #278

Earlier quoted context omitted.

We aren’t talking about assets and what you’ve just said is the reason we have controlled inflation. Currency isn’t supposed to incentivize hoarding it, quite the opposite in fact.

Not everyone agrees with that view. I for one would rather people spent their hard-earned money in a smart, slow and well-thought way than feel compelled by inflation to do so fast and lose.

They may not agree, but currency isn’t supposed to be an investment it’s supposed to be a rationing device.

Re: MasterCard to open up network to cryptocurrencies

#582

Post by nexthash »

b112 wrote: post #557
elyobo wrote: post #548

Earlier quoted context omitted.

I'm not sure what you mean by "lost 250% of its value" - that seems impossible, so I guess something has been lost in translation! Can you clarify?

There are loads of cases of hyper-inflation, which means that the currency's real-world value decreases. Here's the worst I've ever heard of: https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe Yes, you read that right: "However, Zimbabwe's peak month of inflation is estimated at 79.6 billion percent month-on-month, 89.7 sextillion percent year-on-year in mid-November 2008." I recall interviews with government e…

Yeah, it's crazy sad. Apparently the same thing is starting to happen now in Zimbabwe again with a 737.9% annual increase. At this point they are screwing over their people and any reasonable citizen shouldn't rely on or trust the currency at all.

https://www.bloomberg.com/news/articles/2020-07-14/zimbabwe-...

Re: MasterCard to open up network to cryptocurrencies

#583

Post by variaga »

reedjosh wrote: post #559
halukakin wrote: post #373

Earlier quoted context omitted.

Say everyone in an unstable economy were paid in usd. If that country has foreign deficit, if that country has high government debt. What happens? How can the government keep paying its own employees? How does it pay retiree checks? How does it subsidize farming when needed? As long as a country cannot print usd itself, this is a fast shortcut to unemployment, hunger, etc... Strong currencies are not the solution to…

> Say everyone in an unstable economy were paid in usd. Then that country would be paying the unseen tax of inflation as the US banking system prints more and more USD. Said country would basically be a US colony.

TIL Zimbabwe, Ecuador, El Salvador, Palau, East Timor and the British Virgin Islands are all "basically US colonies".

What about countries that don't use the dollar as currency directly, but keep a fixed exchange rate to the dollar - they would be paying the unseen tax of inflation too, right? With a fixed exchange rate if the dollar value falls, so will the value of their currency. So that would mean Hong Kong, Cuba, Jordan and the Netherlands are all "basically US colonies" too. (China may be kind of surprised about that first one.)

Does this work for other currencies, or just $USD? Are Martinique, Andorra, Montenegro and Kosovo "basically EU colonies"? - they all use the Euro as currency, but are not part of either the EU or the EEA.

We don't actually have to hypothesize about what would happen if an unstable economy switched everything over to dollars (or Euros), either directly or by exchange rate peg, because it has already happened, many times.

https://www.worlddata.info/currencies/usd-us-dollar.php

Re: MasterCard to open up network to cryptocurrencies

#584

Post by edgyquant »

ur-whale wrote: post #374
edgyquant wrote: post #278

Earlier quoted context omitted.

We aren’t talking about assets and what you’ve just said is the reason we have controlled inflation. Currency isn’t supposed to incentivize hoarding it, quite the opposite in fact.

>we have controlled inflation We do not have controlled inflation (I'm assuming you're talking about USistan). Please remember that the fed is an independent institution which refuses to get audited.

I am beyond sick of this Libertarian lie that has somehow gone mainstream. The Federal Reserve is audited bi-annually by both a public and private commission

https://www.newyorkfed.org/aboutthefed/fedpoint/fed35.html

https://www.federalreserve.gov/faqs/about_12784.htm

In regards to your first point, inflation is targeted at ~2.5% a year. Some years do better and some do worse but on average that is the inflation rate. I challenge you to look at the inflation rates (provided below) in the first half of last century and provide a reasoned argument for why having years with +16% inflation (and years with -10% inflation) is a better system of currency than what we have now where people freak out if the deviation is over 2%. The gold standard provided a volatility that only hurt those with less money, and the argument your making is a fallacy (and is the reason I left the Libertarian party four years ago.)

https://inflationdata.com/Inflation/Inflation_Rate/Historica...

Re: MasterCard to open up network to cryptocurrencies

#585

Post by Solvitieg »

It's bizarre that in this tread, the US dollar is treated like an immaculate flawless tool for transferring value. But in every thread about economics, its agreed the US dollar lacks trusts, is being manipulated by the fed, and is the leading cause of gross wealth inequality.

Re: MasterCard to open up network to cryptocurrencies

#586

Post by nexthash »

waprin wrote: post #324
systemvoltage wrote: post #84

Earlier quoted context omitted.

What's the point of an unstable, volatile, frantically manipulated currency that is susceptible to social media pump and dump schemes (Elon + Doge)? Currency and its exchange rate needs to be relatively stable for the world to put trust into it. Saying that BTC is stable, but the rest of the world's fiat currency is fluctuating makes no sense. US dollar provides stability and security, I feel confident that a cappucc…

I used to think cryptocurrency was a solution in search of a problem, but the Robinhood fiasco has made me think otherwise. I find their clearing house explanation woefully insufficient in details, and open to the possiblity of being technically the truth but misleading (for example, they gave mass margin to lots of new accounts so they technically lacked collateral, but if they stopped new signups then cleared cash…

Call me back when crypto is being used for anything normal - buying groceries, homes, pay checks, etc rather than trading and speculation. As of now, if my job attempts to pay me in DogeCoin I will quit and file a complaint with the NLRB. The thing is, no matter how much you think the current financial system is crooked, there is always a way to settle disputes through courts and regulators.

The worst financial hiccups happen in areas without regulation. There were no rules on selling subprime mortgages or shorting more stock than exists, but unlike in the cryptoverse if something blows up it can be patched with legislation and restitution to victims. If your crypto gets stolen or a coin gets pumped and dumped, there is no recourse. With no connection to the real world comes no trust and no mercy.

Re: MasterCard to open up network to cryptocurrencies

#587

Post by buran77 »

lazide wrote: post #429
buran77 wrote: post #386

Earlier quoted context omitted.

In all honesty though if you started using BTC as your main currency*, replacing your national currency, one day you'd have your money in BTC, the next day their value would be wiped out. We're not talking about a slow and steady decline, halving of the value in a decade. We're talking "no money to buy food for the next few months". Many people in countries with unstable currencies are particularly vulnerable to this…

I don’t think you’re wrong. You might be missing a bigger game though. BTC is fundamentally deflationary in nature - let’s ignore the price volatility and the like for now, I’ll cover that later. It has also so far proven incredibly resistant to attack, both inside and outside the community and despite easy billion dollar payouts if an attack would be successful. There are also efforts making good progress (lightning…

> There are also efforts making good progress

I agree but in the grand scheme of currencies and payment infrastructures they barely got out the door.

I believe today and for the foreseeable future BTC will be adequate almost exclusively for speculative traders and people who need legal deniability. Most people throw around narrow interpretations for why BTC would be good and they're all good explanations if you look just at selected arguments. Take the "BTC is great as a currency in countries with steady high inflation" stance which might hold if you consider only a really narrow set of set of BTC criteria.

I'm not ruling out anything for some future really. As a personal opinion I believe there's room for e-coins (I'll stay away from the "crypto" nomenclature as they may not rely on a blockchain or crypto per se) but BTC in particular has no real room in a CB for more than a fad (also speculative). Think at the central mandate of a CB: price stability and inflation. Controlling these is quintessentially antithetical to BTC as a main currency, or as a currency. BTC as a decentralized currency takes central banking out of the equation. Or conversely central banks take decentralized currencies out of the equation.

So even if you think of it pragmatically, no government or central bank (since they should be as independent from each other as it gets) would allow replacing the country's currency with BTC both for "selfish" reasons - they'd lose control. But maybe even more importantly for national security reasons. No country wants a coin which can be sent spinning just because some CEO (or worse, your enemy) decided to pull a shady maneuver for personal gain.

The kind of control currencies need to be fit for the purpose of a general, national currency for your citizens simply precludes using BTC at that scale. Should BTC ever become as "big" as a real national currency I'm certain it would show many of the same cracks. Except the small players (average Joe) would have nobody to turn to when things go sour. No central authority, no central responsibility. You see this whenever there's a new hack or financial maneuver that parts people from their hard earned cryptomoney how they suddenly lose that blind faith in "the coin that governments can't control" and start asking for regulation. You can only regulate when you have control.

Re: MasterCard to open up network to cryptocurrencies

#588

Post by ajmurmann »

reedjosh wrote: post #562
imtringued wrote: post #481

Earlier quoted context omitted.

Markets only exist within the context of a political system. They are just a tool to reach a certain policy outcome. The idea of using the free market to replace poor governance is laughable. It's the opposite. You have to set the right policies and incentives and only then will the free market show its true beauty. Markets fail or succeed because of improper or proper governance. It's like a genetic/ML algorithm tha…

> Markets fail or succeed because of improper or proper governance. I have yet to see proper governance last long enough to be of any note and worse governance tends to quickly flip to favor the powerful.

Hong Kong and Singapore might be great examples

Re: MasterCard to open up network to cryptocurrencies

#589

Post by [deleted] »

reedjosh wrote: post #559
halukakin wrote: post #373

Earlier quoted context omitted.

Say everyone in an unstable economy were paid in usd. If that country has foreign deficit, if that country has high government debt. What happens? How can the government keep paying its own employees? How does it pay retiree checks? How does it subsidize farming when needed? As long as a country cannot print usd itself, this is a fast shortcut to unemployment, hunger, etc... Strong currencies are not the solution to…

> Say everyone in an unstable economy were paid in usd. Then that country would be paying the unseen tax of inflation as the US banking system prints more and more USD. Said country would basically be a US colony.

[deleted]

Re: MasterCard to open up network to cryptocurrencies

#590

Post by reedjosh »

variaga wrote: post #583
reedjosh wrote: post #559

Earlier quoted context omitted.

> Say everyone in an unstable economy were paid in usd. Then that country would be paying the unseen tax of inflation as the US banking system prints more and more USD. Said country would basically be a US colony.

TIL Zimbabwe, Ecuador, El Salvador, Palau, East Timor and the British Virgin Islands are all "basically US colonies". What about countries that don't use the dollar as currency directly, but keep a fixed exchange rate to the dollar - they would be paying the unseen tax of inflation too, right? With a fixed exchange rate if the dollar value falls, so will the value of their currency. So that would mean Hong Kong, Cuba…

Your argument from incredulity doesn't make what I say less true. Maybe my language was a bit strong, but there's no denying if somebody can freely make more of something you value, then they're gaining from your use of said valuable.
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