The political case for a blanket cryptocurrency ban • Hacker News Board

Re: The political case for a blanket cryptocurrency ban

#551

Post by kragen » Thu, Apr 01, 2021, 3:49 AM UTC

kragen wrote: post #518

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…

Originally posted at https://news.ycombinator.com/item?id=26238410 >. Slightly edited. If you live in a country with a highly functional banking system and no kleptocracy, Bitcoin is probably a bit puzzling unless you have family in Cuba. But it’s not puzzling at all for those of us who live somewhere in the middle of the broad spectrum between Switzerland and Somalia, because most places have a little kleptocracy. A…

> have lost 57% of their value

Correction: 54%, if we're counting from the September number I gave. The average inflation rate since 02001 has been about 19% per year, although the government statistics are faked to hide this.

Re: The political case for a blanket cryptocurrency ban

#552

Post by seibelj » Thu, Apr 01, 2021, 3:50 AM UTC

imtringued wrote: post #509

seibelj wrote: post #325

Earlier quoted context omitted.

On the contrary, inflation forces you to buy products and invest in things you don't necessarily need, in order to escape the intentional destruction of your wealth. In a world where we are trying to avoid mindless consumption, inflation encourages that. Deflation doesn't discourage investment and consumption. You still need to eat, have shelter, and pursue happiness. It increases the bar at which you will part with…

> On the contrary, inflation forces you to buy products and invest in things you don't necessarily need, in order to escape the intentional destruction of your wealth. In a world where we are trying to avoid mindless consumption, inflation encourages that. Or you can just put your money onto a bank account that nets interest. The fact that interest rates are down is actually the sort of result of deflation. The reser…

This used to be true, until bank accounts started to pay 0%, or a very small amount of interest which is less than even the official inflation rate (let alone the unofficial (and more accurate!) inflation rate).

There is not deflation happening right now. There is massive and sustained inflation, which you can see all around you in terms of high quality food prices (meat, cheese, seafood), housing, all forms of education not subsidized by the government, medicine, cars, and on and on.

The reserve currency status of the US dollar is a side effect of the US' relatively brief global hegemony which is rapidly collapsing, plus the reduced global importance of oil which has been priced almost exclusively in USD. There will be many threats to USD from other countries (China, the EU) and experimental technologies (Bitcoin, Ethereum).

Several generations of economists have bought full-on to a failed economic system. We have been seeing many problems with it over 40 years since we removed any pretense of the gold standard,[0] but we have seen it over and over and over with various crises. Anyone who thinks our current monetary system is the best humanity can do is not thinking critically.

[0] https://wtfhappenedin1971.com/

Re: The political case for a blanket cryptocurrency ban

#553

Post by seibelj » Thu, Apr 01, 2021, 4:15 AM UTC

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…

> Money is a debt from society to its holder.

I disagree. Money is a store of value that is separate from society - gold is an international currency accepted organically because of its useful and intrinsic properties, with thousands of years of history in a wide variety of cultures that had no link before trade began.

There is no "debt" here. Society doesn't "owe" the holder of money anything, necessarily.

Re: The political case for a blanket cryptocurrency ban

#554

Post by alexmingoia » Thu, Apr 01, 2021, 4:47 AM UTC

All markets are speculation. Buyers and sellers speculate on the price of goods and services.

It’s quickly going to become impossible for governments to control cryptocurrency, unless they shut down the Internet. With ring signatures, stealth addresses, and shielded amounts, there’s no telling who has what cryptocurrency, who they paid, or how much was paid. Proof of stake and federated voting consensus are coming to privacy coins, so there’s no mining farms to shut down.

Re: The political case for a blanket cryptocurrency ban

#555

Post by challenger-derp » Thu, Apr 01, 2021, 5:42 AM UTC

abrahamepton wrote: post #425

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…

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…

Can't deny the fact that it's written by someone who's quite literally "DickingAround".

Re: The political case for a blanket cryptocurrency ban

#556

Post by athrowaway3z » Thu, Apr 01, 2021, 6:00 AM UTC

Fern_Blossom wrote: post #434

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…

First, I'd like to really understand why people say crypto "escapes inflation". The only argument has been the artificial scarcity mechanisms built in the currency. Scarcity is a seasoning to the concept of value, not the main course. I don't know of anyone in economics in the last 100 years that has ever pushed forward the idea that scarcity is all you need to create value... except for Youtube economic cartoons. "F…

This paper and this comment sound like cognitive dissonance between monetary theory and psychological reality.

Don't get me wrong, crypto's price is a ponzi scheme build on fomo. Scarcity shouldn't be the only thing required to create value. But here we all are proving time and time again that psychology at scale _can_ at times be more powerful then economic theory.

Also: > With a blanket ban on cryptocurrency, the economic engine of the American system would do what it does best, a new wave of investment from the private sector would be redirected back into productive enterprises and new ventures that could strengthen US markets and the Dollar instead of undermining it.

American banking infrastructure was antiquated and rotting in its own success before bitcoin was a thing. Paying money with a phone is still considered 'innovation' in the US as far as I've heard, lagging the EU, India, and China by a decade.

> Halt all wire transfers of dollars in and out of cryptocurrency exchanges. > Halt foreign entities trading in dollar cash-equivalent crypto assets. > Add Chinese and other foreign cryptocurrency exchanges hiding in tax-havens to sanctioned entities lists. > Regulate the sale of any existing cryptocurrency assets to US persons by classifying them as securities investment contracts moving forward.

I'm not sure what the Dollar is going to be in 20 years, but if the US did this, historians would look back at this action starting a new global divide that ends in war and/or the collapse of the US dollar.

Which brings up another point that gets glossed over but should be stated at least once in this context: The status of USD as a reserve currency for every bank around the world is what allows America to print so much money. It is a national security issue and the US will use force if the position is at risk.

And in the smoldering ruins of some unnamed city, someone can trade his bitcoins to buy a can of pre-war chicken and a pack of cigarettes because bitcoin escaped inflation.

Re: The political case for a blanket cryptocurrency ban

#557

Post by midasuni » Thu, Apr 01, 2021, 6:27 AM UTC

dia80 wrote: post #356

atwebb wrote: post #345

Earlier quoted context omitted.

Things brings up a side point I can't quite understand. How does the price of BTC, which is almost infinitely divisible, affect usage? I see comments like "We're early, price can still rise, etc". Outside of a store of value any usage / institutional use for transactions wouldn't matter right? The BTC is a proxy for the money / collateral on the sides. If I buy a hamburger with BTC: If it is settled in BTC then the b…

Deflation. The price of the burger in BTC has largely been falling. Why spend your appreciating* bitcoins when they will bu worth more tomorrow. If the price is stable this effect goes away and you might as well spend them. * Who knows if this will continue

Even if BTC hadn’t had it’s ridiculous boom since October, it’s still deflationary from the simple fact every day there are fewer bitcoins as people lose keys.

Re: The political case for a blanket cryptocurrency ban

#558

Post by ablekh » Thu, Apr 01, 2021, 6:29 AM UTC

seibelj wrote: post #553

karpierz wrote: post #539

Earlier quoted context omitted.

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…

> Money is a debt from society to its holder. I disagree. Money is a store of value that is separate from society - gold is an international currency accepted organically because of its useful and intrinsic properties, with thousands of years of history in a wide variety of cultures that had no link before trade began. There is no "debt" here. Society doesn't "owe" the holder of money anything, necessarily.

I think your confusion stems from the imperfect wording in the original phrase. What @karpierz meant (and his/her subsequent sentence supports it) is a) that society in this context implies government and b) that money is a legal tender that, upon tendering (i.e., offering as payment), discharges any debts (e.g., loans, purchases, taxes).

By the way, you're wrong in that money a) is only a store of value (it also functions as a medium of exchange and a unit of account) and b) is separate from society (in the modern world, in most countries, it is only government who has legal right to issue [primary] money).

Re: The political case for a blanket cryptocurrency ban

#559

Post by nec4b » Thu, Apr 01, 2021, 6:33 AM UTC

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…

>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. 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. Instead it's protected by this mining fleet. And if you want to contest ownership there's no one to invade, no one to attack; the best you can do is make a fleet and try to mine.

Who do you think is keeping the infrastructure (electricity, internet, companies that produce equipment,..) on which bitcoin runs safe?

Re: The political case for a blanket cryptocurrency ban

#560

Post by isolli » Thu, Apr 01, 2021, 6:58 AM UTC

pydry wrote: post #343

caeril wrote: 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 also erodes real salaries, which is a useful way to adjust salaries in a world with sticky prices (where nominal contracts are not easily adjusted).