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The political case for a blanket cryptocurrency ban

stephendiehl.com

441–450 of 630 posts

Re: The political case for a blanket cryptocurrency ban

#441

Earlier 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…

> The way to break the cycle is to have cash start to lose value, or inflate. Then the interest rates drop, and people start to spend their money.

If people's money starts losing value, the last thing they would do is to be concerned with interest rates. With less valuable money, people would simply be able to afford a smaller consumption basket and, thus, spending will stay flat & consumption will decrease.

> ... people make 10x the salary ...

Where did this come from? Just because the productivity would increase 10x / cost would decrease 10x, it does not mean that workers would receive 100% of the relevant benefits. Most likely, 90%, if not more, of those would be routed to business owners (and robots' owners, if the machines are leased instead of bought).

Re: The political case for a blanket cryptocurrency ban

#442
post #395
post #384

Earlier quoted context omitted.

> it would be pretty easy to perform a 51% attack Yes, and the elephant in the room with Bitcoin is that it's only going to get easier. Despite the categorization of Bitcoin as non-inflationary, the computational power of the network is currently ~85% subsidized by block rewards that grant miners new coins (i.e., inflation). Once those are diminished through halvings, either transaction costs will have to go up about…

Or the network finds consensus on an algorithm change where the block subsidy keeps going, thereby continuing to pay the miners. The 21 million bitcoin cap isn’t as immutable as people claim. It’s just that most Bitcoin stakeholders agree to keep it there, for now. That Bitcoin is some immutable “backed by math” financial system has been a charade all along. It’s very much backed by people, and proof-of-work is a Rub…

Of course the problem with this approach is that (at least part of) the Bitcoin community see it as non-inflationary - see above. So if you remove that cap then the value surely comes down significantly.

Re: The political case for a blanket cryptocurrency ban

#443
Jeez. I have my own issues with cryptocurrencies, but blanket banning them? How do you even enforce this??

Also, if you're going to bring ecology into it, then instead of advocating for the ban of cryptocurrencies, it makes much more sense to put your energy into banning the economic system which systematically incentivizes externalities (of which carbon pollution is one).

Re: The political case for a blanket cryptocurrency ban

#444
post #105
post #21

This guy didn't buy Bitcoin so he want government to ban it. I am joking, but I am sure there is some truth to that. If we start banning what is a bit shady, we will end up shutting down 80% of businesses out there that make money.

This is a strange sort of argument and seeing it so often from cryptocurrency proponents makes me feel that the pro-cryptocurrency are weaker not stronger. On the one hand, yes, I'm sad that I didn't buy $100 of bitcoin ten years ago and hold until now. Who wouldn't be? But on the other hand, how does this even bear resemblance to an argument? > "The political case for a ban on fossil fuels" So sad that you didn't bu…

Objectively, it's a humble-brag, as if Bitcoin users are somehow among the enlightened and, by anyone "missing out", they will forever be poor.

Or wait... actually I was told it's not too late! Bitcoin is only just getting started! If you don't buy now, you'll miss out on more future gains! Right!?

Well, it's becoming less of a compelling argument, when to even 2x your input, BTC would have to hit a mind boggling $118k USD per coin as of this very post. In essence, we are finding a diminishing point of returns already. You can do better than that much more easily and quicker on the stock market right now, by comparison.

It's like coiners want to play both sides of fence. They want to ridicule and taunt those that they say didn't see the light in 2009 or thereabouts, but at the same time, gain new recruits, so they can continue to fatten their holdings all the same.

Re: The political case for a blanket cryptocurrency ban

#445

Earlier quoted context omitted.

This is pretty damn incoherent. > the core reason for cryptocurrencies; escaping inflation and control Maybe in a whitepaper. In the real world, it's mostly about speculation and enabling crime. > Law and order stands on the backs of a lot of stuff and CO2. Bitcoin is an example of one little piece of this not needing all that stuff. Ok...? This is nonsensical. > Instead it's protected by this mining fleet. And if yo…

> Maybe in a whitepaper. In the real world, it's mostly about speculation and enabling crime. Speculation I could agree with... however, Crime? Really? Got anything to back this up? The vast majority of crime is performed using cash. https://hodlhard.io/blog/bitcoin-crime/

> Just last week, the United Nations alleged that North Korea was funding its nuclear weapons program using funds from hacked cryptocurrency exchanges, alongside other thefts. The U.N. believes that over $300 million in crypto assets have been stolen by various North Korean hackers.[1]

> Iranian thinktanks have also emphasized the need for the nation’s government to use cryptocurrencies to circumvent US-led international sanctions. It now appears that the Office of President Hassan Rouhani has become more serious about using crypto. [2]

A rapidly growing percent of nuclear weapons proliferation is being funded by crypto. That's way worse for the planet than crime performed using cash.

[1] https://www.coindesk.com/doj-charges-3-north-korean-hackers-...

[2] https://www.crowdfundinsider.com/2021/03/172786-iran-is-repo...

Re: The political case for a blanket cryptocurrency ban

#446

Seems to me that Stephen is not well informed on crypto in general. This article is really only relevant to Bitcoin. Take a project like Brave for instance which is disrupting the online advertising model: https://brave.com/ (I am completely unaffiliated, just a fan of the project) Can you look at this project and tell me with a straight face it is bad for the environment and should be banned by government? Because t…

I used to have a lot of respect for him, he's very intelligent and a great hacker. But man he's really gone down the rabbit hole basically on the edge of consipiracy theorist lately. It's sad. His viewpoints are naive and he never proposes viable solutions. It's easy to say ban "X" when that is never going to happen. If he was really interested in a solution he would acknowledge the benefits that people are getting o…

>> He is CTO at Adjoint - "digitises cash and settlement processes for multinational corporates."

How can anyone respect such person? His job is as unethical as it gets. He is a monster and a woke hypocrite.

Re: The political case for a blanket cryptocurrency ban

#447

This 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…

>This article seems to intentionally ignore the core reason for cryptocurrencies; escaping inflation and control.

You aren't escaping inflation. You're escaping a savings glut which is the mortal enemy of inflation.

Re: The political case for a blanket cryptocurrency ban

#448
post #343
post #262

Earlier quoted context omitted.

> it is far from proven that target inflation is bad Target inflation is specifically intended to promote consumption. Consumption, particularly in the form of atoms, not bits, is approximately 90% correlated with greenhouse gas emissions, despite all our efforts to roll out renewables. Setting the "inflation is good" argument alongside an article decrying the climate impact of inflation-resistant currencies is . . .…

>Target inflation is specifically intended to promote consumption. No, it's intended to erode debt. Inflation is effectively a transfer of wealth from creditor to debtor.

It does do that, but the primary purpose is to push investment. To protect money from inflation you have to put it to work. Wealth is a verb, not a noun.

Re: The political case for a blanket cryptocurrency ban

#449

Earlier quoted context omitted.

I mean, if you'd like to see some academic research backing up that it is indeed the case, see here: https://academic.oup.com/rfs/article-abstract/32/5/1798/5427... "We find that approximately one-quarter of bitcoin users are involved in illegal activity. We estimate that around $76 billion of illegal activity per year involve bitcoin (46% of bitcoin transactions), which is close to the scale of the U.S. and European…

Things have changed since your study. Chainalysis released a report in February (they are a company who specialise in tracking illegal transactions). The TLDR is that illegal transactions make up 0.4% of BTC transactions these days. > https://en.cryptonomist.ch/2021/01/20/chainalysis-crypto-ill...

Thanks for sharing this.

Re: The political case for a blanket cryptocurrency ban

#450
post #445

Earlier quoted context omitted.

> Maybe in a whitepaper. In the real world, it's mostly about speculation and enabling crime. Speculation I could agree with... however, Crime? Really? Got anything to back this up? The vast majority of crime is performed using cash. https://hodlhard.io/blog/bitcoin-crime/

> Just last week, the United Nations alleged that North Korea was funding its nuclear weapons program using funds from hacked cryptocurrency exchanges, alongside other thefts. The U.N. believes that over $300 million in crypto assets have been stolen by various North Korean hackers.[1] > Iranian thinktanks have also emphasized the need for the nation’s government to use cryptocurrencies to circumvent US-led internati…

What's the issue with Iran using it? Or is it that Iran are just "bad guys" therefore if they use it must be bad.

In that basis let's get rid of nuclear power because Iran use that. I think they also have the internet so while we are at it let's get rid of that.

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