typical nocoiner FUD
The political case for a blanket cryptocurrency ban
361–370 of 630 posts
Re: The political case for a blanket cryptocurrency ban
#362Earlier quoted context omitted.
It has never been proven that deflation is bad - Keynesians claim this is the worst thing in the world, but I still have never had it explained to me coherently way deflation is inherently a bad thing.
If your currency deflates, that means a dollar today is worth less than a dollar tomorrow. When you invest money (via loans or buying equity), you trade currency for tangible assets, like stocks or capital. In order for the investment to make sense, the growth on the asset needs to be larger than the growth of the value of the money, plus risk. So in a deflationary currency, loan interest rates must be higher to be w…
No. It’s worth $10 because you saved your (non-inflationary) money. And you spent the last 10 years making a bread robot instead of working in the financial sector.
And how is ‘investing’ a productive use of capital? In deflationary regime, business is about cash flow. Inflationary regime investments are all speculation, and everybody has to play the game.
This Keynesian argument comes from a nihilistic disregard for social structures, the environment, and future generations. Look him up. “In the long run, we’ll all be dead” - Keynes
Re: The political case for a blanket cryptocurrency ban
#363Earlier quoted context omitted.
I never understand the counter-inflation argument...most economists understand inflation is something to be managed, but it is far from proven that target inflation is bad. There are many useful economic properties of inflation. Meanwhile, Bitcoin has undergone such massive speculative appreciation that everything around it has deflated in comparison. As a result, bitcoin is spectacularly less useful than it would ha…
It has never been proven that deflation is bad - Keynesians claim this is the worst thing in the world, but I still have never had it explained to me coherently way deflation is inherently a bad thing.
Deflation can be devastating to those in debt. If you take out a loan for a house or a tractor, then subsequently discovering that you have to pay back substantially more than you borrowed (before even factoring in interest!) could be quite a shock.
To give a simplified example, if a farmer takes out a $50k loan, then at current prices they might be thinking that can be repaid by selling 10,000 bushels of produce at $5/bushel. However, if there is subsequently 20% deflation, then the price would fall to $4/bushel and the farmer would all of a sudden find they have to sell an additional 2500 bushels to get out of debt. If they can't, they risk losing everything to foreclosure.
Re: The political case for a blanket cryptocurrency ban
#364Earlier quoted context omitted.
> But the competition is fiat; backed by fighter jets and nukes; literally. How is it that someone can't steal your money? The bank makes sure. How is it the bank can be sure? The cops protect them. How is it the cops aren't overwhelmed? The military protects them. At first glance, I find this an interesting take and it makes me rethink some things. But I don't think I find it very convincing, or at least it's too ex…
>But I don't think I find it very convincing, or at least it's too exaggerated. Fighter jets and nukes primarily protect physical property and institutions, not cash. Typically, the concept of "military force" like fighter jets, aircraft carriers, etc in criticism about fiat currency (especially $USD) is about connecting the dots to explain the strength of that currency. E.g., USA gets Saudi Arabia to sell oil denomi…
Not just denominated, settled. They literally want USD for their oil instead of SAR (riyal). (Sure, SAR is pegged to USD.)
Here's a very thought provoking article about the "dollar system": https://phenomenalworld.org/analysis/the-class-politics-of-t...
Re: The political case for a blanket cryptocurrency ban
#365[deleted]
Re: The political case for a blanket cryptocurrency ban
#366Earlier quoted context omitted.
Gold has been valuable for centuries. There is no BitGold network that, if it went under, would cause your gold to simply evaporate. Once mined and processed, gold is incredibly stable, 2000 year old gold coins can be dug up and sold as antiques. All currencies have value, not because "humans" value them, but because some organization of humans said "this piece of paper is legal tender". They lose their value when th…
> There is no BitGold network that, if it went under, would cause your gold to simply evaporate. However, if a government does go down, then its currency evaporates.
but gold doesn't
Re: The political case for a blanket cryptocurrency ban
#367Earlier quoted context omitted.
Gold has been valuable for centuries. There is no BitGold network that, if it went under, would cause your gold to simply evaporate. Once mined and processed, gold is incredibly stable, 2000 year old gold coins can be dug up and sold as antiques. All currencies have value, not because "humans" value them, but because some organization of humans said "this piece of paper is legal tender". They lose their value when th…
> There is no BitGold network that, if it went under, would cause your gold to simply evaporate. However, if a government does go down, then its currency evaporates.
> However, if a government does go down, then its currency evaporates.
Sometimes, sometimes the successor regime accepts/redeems it; I think that has been far more common when governments actually failed in the modern era.
Re: The political case for a blanket cryptocurrency ban
#368Earlier quoted context omitted.
>But I don't think I find it very convincing, or at least it's too exaggerated. Fighter jets and nukes primarily protect physical property and institutions, not cash. Typically, the concept of "military force" like fighter jets, aircraft carriers, etc in criticism about fiat currency (especially $USD) is about connecting the dots to explain the strength of that currency. E.g., USA gets Saudi Arabia to sell oil denomi…
Not just denominated, settled. They literally want USD for their oil instead of SAR (riyal). (Sure, SAR is pegged to USD.) Here's a very thought provoking article about the "dollar system": https://phenomenalworld.org/analysis/the-class-politics-of-t...
Why would they want riyal for their oil? That would cause massive price action and destabilize their currency causing wild swings in the value of the riyal depending on the demand for oil. The last thing in the world an export economy wants is a currency that becomes stupidly expensive when people want it and worthless when people don’t. Settling in dollars allows for a stable riyal.
Re: The political case for a blanket cryptocurrency ban
#369This article seems to intentionally ignore the core reason for cryptocurrencies; escaping inflation and control. The article then proposes to use the law to bring those people back within the control of fiat and government oversight. I no longer think the environmental argument is really plausible here. Clearly crypto mining is emitting using a lot of power and some of that is CO2. But the competition is fiat; backed…
> But the competition is fiat; backed by fighter jets and nukes; literally. How is it that someone can't steal your money? The bank makes sure. How is it the bank can be sure? The cops protect them. How is it the cops aren't overwhelmed? The military protects them. At first glance, I find this an interesting take and it makes me rethink some things. But I don't think I find it very convincing, or at least it's too ex…
> Fighter jets and nukes primarily protect physical property and institutions, not cash.
This is basically it. I don't know how bitcoin advocates expect property rights (in fact, any right) to be upheld in the absence of a coercive state. They have become so removed from reality that they don't see the most obvious things.
Re: The political case for a blanket cryptocurrency ban
#370Earlier quoted context omitted.
> But the competition is fiat; backed by fighter jets and nukes; literally. How is it that someone can't steal your money? The bank makes sure. How is it the bank can be sure? The cops protect them. How is it the cops aren't overwhelmed? The military protects them. At first glance, I find this an interesting take and it makes me rethink some things. But I don't think I find it very convincing, or at least it's too ex…
>But I don't think I find it very convincing, or at least it's too exaggerated. Fighter jets and nukes primarily protect physical property and institutions, not cash. Typically, the concept of "military force" like fighter jets, aircraft carriers, etc in criticism about fiat currency (especially $USD) is about connecting the dots to explain the strength of that currency. E.g., USA gets Saudi Arabia to sell oil denomi…
I think you can only really fairly compare the energy use to the physical infrastructure of the $USD (and/or other currencies) because the defense of the Petrodollar also defends general energy usage which all industries and organizations benefit from. Oil is used for plastics in medicine, computers, cars, fuel, fertilizer, you name it. The defense of the Petrodollar would be a defense of all of those things. From an energy standpoint can you fairly proportion out what energy is used to defend the $USD by industry or in a more succinct way?
The fact that Nvidia can create chips for GPUs, and Amazon can package them up and deliver them and all your other computer parts to your front door is also subsidized by the Petrodollar. Everything is!
If the U.S. just stopped defending the Petrodollar, it's not like the $USD just goes away or ceases to be valuable. The fighter jets don't disappear or stop being made.
It's also slowly becoming outdated. The U.S. is a net exporter of energy and the shale revolution has made the Middle East just a bit less important.
Anyway - I don't think it's a great exercise to compare Bitcoin energy usage to the "energy usage" of the $USD exactly because it's so difficult to really measure. You also have to think forward a little bit - as cryptocurrencies proliferate more companies will arise around new technologies, custodianship, etc. so when we talk about some abstract number of people in an office now supporting the $USD, we have no idea what the future number of people supporting the cryptocurrency networks will be in the future - it might actually create more jobs and more energy usage.
I see one real advantage to Cryptocurrency: protection against government misuse of monetary policy.
But aside from that, it's still up in the air for me to see how things go. The $USD is a pretty good currency (mostly holds value in the short term, accepted everywhere, highly liquid), but it isn't a phenomenal store of value. All of these fiat currencies and cryptocurrencies are going to be competing in an arena and it's going to be interesting to watch.