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The political case for a blanket cryptocurrency ban

stephendiehl.com

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Re: The political case for a blanket cryptocurrency ban

#541

Post by wavepruner »

slibhb wrote: post #32
_nckn wrote: post #5

I think the main premise of this article is the fact that crypto's carbon emission is insane, especially Bitcoin, which I agree (I don't hold Bitcoin for this exact reason). But there are many other crypto that uses Proof of Stake, way way greener than Proof of Work, such as Cardano. Even Ethereum is transitioning to Proof of Stake. This article should be re-titled "The Political Case for a Blanket Proof of Work Ban"…

The main premise of the article is that cryptocurrencies are "speculation for speculation’s sake," i.e. gambling, and that's bad. Also, the article claims that they contribute to inequality. The green stuff is basically a side note. I don't think it's a terribly strong case but I suppose it depends on whether you agree that crypto is gambling and if you think gambling should banned. Anyway, I think lots of people stu…

Just want to quickly say that I'm disabled and I work in the Bitcoin/crypto industry, largely because every other industry has gate-keepers that would never hire someone like me.

None of the people I interact with and work with are gambling. We avoid that crowd because it's not sustainable nor does it create long-term value.

Re: The political case for a blanket cryptocurrency ban

#542

Post by biztos »

mw888 wrote: post #500
biztos wrote: post #251

Earlier quoted context omitted.

Sure, people are using Bitcoin as a store of value, but I think a lot of those people think it will just keep going up. Which is not a super rational thing to believe about an asset whose value has no relation to anything in the real world, and nothing to prop it up but the people who believe the same thing. Bitcoin is up something like 800% for the year. It might be up another 800% in six months! Or it might go down…

It’s easy to take this stance and call others crazy, but what would it take for you to believe your current opinion is wrong about Bitcoin, apart from it changing to something which is in spirit and function not equivalent? If the answer is: “nothing would change my mind”, then perhaps you are the crazy one; after all, carbon copies of you have been around for every cycle of bitcoin growth. Do speculative bubbles hav…

If it must pop in order to be (have been) a bubble then yeah, maybe it never pops, and by that definition it would not have been a bubble, but how long do you have to wait for that to be true?

I don't think that a very weird year or two is sufficient.

A bubble, at least as I understand it, can pop more than once, after all we're not talking about a real physical bubble. Was there a real-estate bubble? I think there was, but prices now make it hard to remember that.

I don't see how my current opinion is at odds with Bitcoin going up util I die and it melts the ice caps, hopefully in that order. If you're asking whether I'd stop thinking it's a bubble, I don't know -- I can be crazy (to miss out on the growth) and also right (if it pops some day).

And of course you're right about "carbon copies" -- I ignored/missed/misread every crypto cycle so far. I'm not above buying some BTC at $100K but I probably won't, for reasons having nothing to do with crypto per se.

Re: The political case for a blanket cryptocurrency ban

#543

Post by ludston »

ericmay wrote: post #370
jasode wrote: post #263

Earlier 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…

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…

As well as protecting against government misuse of monetary policy it can be used to prevent the govt from using monetary policy for effective good. It strips money from being subject to democratic process altogether, which logically will lead to inequality. It's a libertarian/anarchists dream.

Re: The political case for a blanket cryptocurrency ban

#544

Post by seibelj »

imtringued wrote: post #513
abakker wrote: post #221

Earlier quoted context omitted.

the Keynesian wisdom was that Inflation is good for borrowers and that deflation is good for lenders. Most governments are managing for borrowers since borrowers tend to be investing and it has been a long-held economic axiom that investment is good. Deflation decreases the value of work you have already done.

>Deflation decreases the value of work you have already done. Are you sure? Deflation increases the value of work you have already done and decreases the value of work you will do in the future. Simple example: If I immediately convert my paycheck in BTC then I would have earned more BTC in 2013 than in 2021. My work in 2013 would be worth more than the work I did in 2021.

You have a misunderstanding of "value", "worth", "cost", "price", etc. In our inflationary environment, you would (ideally) be paid more for the same service in the future. This does not mean you are automatically worth more every second that passes - rather, the value of the money you are paid in declines. A loaf of bread is a loaf of bread, but the dollar declines in value continuously. You do not automatically think your skills are "worth more" with every second that passes in an inflationary world, just as your skills aren't "worth less" in a deflationary world by virtue of time passing.

In a deflationary environment, you would naturally be paid less over time, rather than paid more. Rather than a default of losing money, you are in default of gaining money. Prices adjust lower, and by saving money you are naturally gaining wealth vs. people with lower time preference who are spending money.

But in reality, all of this is psychology. There is an amount of wealth in the world, and this is the sum total of all owned assets. We can use any unit of measurement we like to value this. If today there is $1 million total in existence, and tomorrow we double the money supply and there is $2 million, we aren't all suddenly 2x richer. Just as when the central banks print money, people aren't richer - we are redistributing wealth away from people's savings and towards the receivers of money. Wealth is only truly created when useful and productive enterprises grow.

Re: The political case for a blanket cryptocurrency ban

#545

Post by traceddd »

louwrentius wrote: post #483
fcanesin wrote: post #147

What a idiotic essay, the same arguments could be made for the ban of most precious metal mining since majority of it goes to storage deposits. Cryptocurrencies actually bring several benefits and better solutions for the problem of trust in a store-of-value or exchange contract. The world needs Bitcoin now more than ever, we are already living in a multilateral world where US and China exert pressure to force intern…

Governments print money to keep society from collapsing. What you rail against is a feature not a bug. So many cryptocoin advocates don’t seem to understand how societies work. The world can do without BTC just fine. Now more than ever. It doesn’t actually solve a problem we face. Only those who have Bitcoin seem so adamant about it. No coincidence right? Because we know it needs more ‘suckers’ to buy into the ponzi…

A centrally controlled emission is a feature that has significant downsides. Whether we want this feature is the point of discussion... Societies with economies existed before fiat and this centrally controlled emission seems to be quite shaky now.

It’s not about suckers or even wealth, it’s about whether control should be given to a greater entity who may save us, or if such a thing is too important to trust to a very human and often flawed agency.

People who are adamant about Bitcoin were already sold on it before they found it. Just as those who adamantly oppose it.

Re: The political case for a blanket cryptocurrency ban

#546

Post by Sanzig »

mw888 wrote: post #502
Sanzig wrote: post #194

Earlier quoted context omitted.

Unless you are running completely detached from the public grid, consuming renewable energy for crypto mining absolutely indirectly produces CO2. You are buying renewable energy that could otherwise be sold to another customer/jurisdiction where it would displace fossil fuel usage. This isn't an academic exercise, this is an issue that renewables operators are dealing with right now. Hydro-Quebec is the state-owned c…

Well maybe we should ban gold mining instead of bitcoin mining. It uses more energy and anyone who can understand the source code understands that Bitcoin does gold’s job, only 10x better.

1. Gold is used for other things than just investment, including jewellery and industrial uses (principally electronics). Can you plate a connector with Bitcoin?

2. I'm willing to bet that the economic multiplier for money spent on a gold mine is far higher than a crypto farm. Even looking at job creation alone, gold wins.

3. The literature [1] disagrees with your assertion that gold mining uses more energy than bitcoin generation.

[1] https://www.nature.com/articles/s41893-018-0152-7

Re: The political case for a blanket cryptocurrency ban

#547

Post by ablekh »

karpierz wrote: post #539
ablekh wrote: post #531

Earlier quoted context omitted.

Fair enough, points taken. I appreciate your clarifications and our brief, but nice, discussion. :-) > And so if the good becomes cheaper to produce over time, you'd want to inflate the cost of it to keep it level. I'm a bit confused about this part - why would you want to "keep it [the cost] level" between 1921 and 2021?

Money is a debt from society to its holder. You can exchange work or stuff for it, with the expectation that society will accept it at a later time for some stuff. So it's just a matter of deciding how the debt evolves over time. That part is specifically meant to contrast deflation with either stagflation or inflation. If you drop the nominal price over time, you're setting a Ponzi scheme. By virtue of selling somet…

Interesting insights, thank you for sharing. I will need to think it over as well (and maybe read up on economics) ...

Re: The political case for a blanket cryptocurrency ban

#548

Post by hakfoo »

DickingAround wrote: post #53

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…

The thing is that we're already paying for most of the law/order/government infrastructure anyway. Once you hire the cops and soldiers to enforce "he can't take your sticks and rocks", "he can't reallocate your bank balance" adds trivial overhead.

Re: The political case for a blanket cryptocurrency ban

#550

Post by ibrahimsow1 »

kaliali wrote: post #519
abrahamepton wrote: post #425

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…

The real reason why anyone I know wants cryptocurrencies is to escape inflation and control. The US financial system will collapse, it's not a matter of if but when. You can choose hyperinflation, government seizing assets, government declaring bankruptcy, or cryptocurrency.

A highly developed sovereign government will never go bankrupt. Just experience economic turmoil. They can print more money, or draw on their deficit. US is the world reserve currency and will be for the foreseeable future. Fiscal policy in the US could comfortably control inflation, before it becomes hyper.
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