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Online Cash Bitcoin could Challenge Governments, Banks

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Re: Online Cash Bitcoin could Challenge Governments, Banks

#171

Post by nerfhammer »

vrotaru wrote: post #168
nerfhammer wrote: post #165

Earlier quoted context omitted.

The US dollar was backed by gold until 1933. The deflationary contraction occurred between 1929 and 1933. So, there you go.

> The deflationary contraction occurred between 1929 and 1933. Sorry, but are you serious? For starters: "By keeping industrial wages too high, Hoover sharply depressed employment beyond where it otherwise would have been, and that act drove down the overall gross national product," Ohanian said. "His policy was the single most important event in precipitating the Great Depression." http://newsroom.ucla.edu/portal/uc…

.... you think there was inflation between 1929 and 1933?

Re: Online Cash Bitcoin could Challenge Governments, Banks

#172

Post by nerfhammer »

mike_esspe wrote: post #170
nerfhammer wrote: post #165

Earlier quoted context omitted.

The US dollar was backed by gold until 1933. The deflationary contraction occurred between 1929 and 1933. So, there you go.

There was fractional reserve banking ( http://en.wikipedia.org/wiki/Fractional-reserve_banking ). Banks could lent more dollars, than they had in reserves. Money supply (M2) was expanding with great rate till the 1928.

Let me tell you about the dragon in my garage.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#173

Post by joe_the_user »

indrax wrote: post #167
joe_the_user wrote: post #131

Earlier quoted context omitted.

The problem is that since an alternative currency is still pretty purely hypothetical, we don't know with any certainty that it wouldn't be subject to similar abuses. Moreover, aside from inflation, the other abuses you list are essentially abuses of power and if governments maintain power - their official monopoly of force and violence, they will continue to be able to engage in these other actions. EI, I don't thin…

With a Truecrypt partition you could show them your insignificant bitcoin wallet, and only go back to your regular bitcoin wallet after they leave. True this would currently require a lot more security consciousness than most people have, but conceivably all the necessary features could be built into a bitcoin client.

Actually, Bitcoin transactions are public - it's inherent in the scheme that verifies the transactions. Thus determining a person's net worth should be extremely easy.

This fact might make bit coin less appealing than cash for many things where anonymity is important.

(Also, Whether having public transactions would be enough to make the transaction "work" would be a different question - what happens when you don't delivery the promised goods - but that's a different question).

Re: Online Cash Bitcoin could Challenge Governments, Banks

#174

Post by Sapient »

joe_the_user wrote: post #173
indrax wrote: post #167

Earlier quoted context omitted.

With a Truecrypt partition you could show them your insignificant bitcoin wallet, and only go back to your regular bitcoin wallet after they leave. True this would currently require a lot more security consciousness than most people have, but conceivably all the necessary features could be built into a bitcoin client.

Actually, Bitcoin transactions are public - it's inherent in the scheme that verifies the transactions. Thus determining a person's net worth should be extremely easy. This fact might make bit coin less appealing than cash for many things where anonymity is important. (Also, Whether having public transactions would be enough to make the transaction "work" would be a different question - what happens when you don't de…

There are a number of escrow services available for Bitcoin transactions. https://clearcoin.appspot.com/ for example.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#175

Post by danenania »

artsrc wrote: post #166
danenania wrote: post #156

Earlier quoted context omitted.

These are well-worn fallacies. First, falling prices do not cause hoarding--demand for goods will increase if anything. Mild deflation is actually the sign of a healthy economy, competition, and technological innovation. Just look at the consumer electronics industry. Why do people buy iPads when they know a cheaper and better one will come along in the next couple years? According to your theory, wouldn't they just…

Productive investment means spending cash on something, like property, R&D, or plant and equipment. I don't see how this is the same as hoarding cash. There is a psychology that iPads, and to an even greater extent iPhones, are a short life time product. So their price in a couple of years does not matter. Buying one now will not prevent you from buying one at the cheaper price in a couple of years as well.

"Productive investment means spending cash on something, like property, R&D, or plant and equipment. I don't see how this is the same as hoarding cash."

Exactly. No one actually hoards cash. Why would they? There is an enormous incentive to make idle money useful. But the greater point is: even if they do, so what? The money will be utilized at some point. That's what it's for. Why is it better used now than in the future? What is the 'correct' ratio of savings to immediate consumption? Given that you're unlikely to provide a convincing answer to this, wouldn't it be reasonable to let the owners of the money determine its allocation?

"There is a psychology that iPads, and to an even greater extent iPhones, are a short life time product. So their price in a couple of years does not matter. Buying one now will not prevent you from buying one at the cheaper price in a couple of years as well."

This is because the iPad's price falls and its quality increases. If each new iPad were twice the cost for the same performance, I don't think the lines at the Apple Store would get quite as long.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#176

Post by danenania »

nerfhammer wrote: post #163
danenania wrote: post #156

Earlier quoted context omitted.

These are well-worn fallacies. First, falling prices do not cause hoarding--demand for goods will increase if anything. Mild deflation is actually the sign of a healthy economy, competition, and technological innovation. Just look at the consumer electronics industry. Why do people buy iPads when they know a cheaper and better one will come along in the next couple years? According to your theory, wouldn't they just…

Deflation is almost invariably a sign of economic distress. This can easily be observed historically. By the way the term I think you mean is "quantity demanded" with respect to price, "demand" is invariant to price. Under deflation average income decreases. It's not like everyone is suddenly richer. Your employer gets less money, and so has to pay you less, or lay off a portion of their workforce. The price of labor…

America had steady deflation during a period of massive economic expansion in the late 1800s.

Deflation is only a sign of distress historically when preceded by government-induced monetary expansion. A boom causes a bust.

Wages are sticky so moderate deflation strongly benefits workers. Both wages and savings will gradually increase in purchasing power. Inflation punishes the lower classes disproportionately for the same reasons. It is the primary driver of income inequality in the world.

That anyone has been convinced a massive counterfeiting scheme in their currency is doing them a favor is a monumental feat of propaganda.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#177

Post by vrotaru »

nerfhammer wrote: post #171
vrotaru wrote: post #168

Earlier quoted context omitted.

> The deflationary contraction occurred between 1929 and 1933. Sorry, but are you serious? For starters: "By keeping industrial wages too high, Hoover sharply depressed employment beyond where it otherwise would have been, and that act drove down the overall gross national product," Ohanian said. "His policy was the single most important event in precipitating the Great Depression." http://newsroom.ucla.edu/portal/uc…

.... you think there was inflation between 1929 and 1933?

I think there was no deflationary spiral between the dates you mentioned. And... since GD lasted a lot longer than that how is that relevant?

Re: Online Cash Bitcoin could Challenge Governments, Banks

#178

Post by fauigerzigerk »

weavejester wrote: post #96
fauigerzigerk wrote: post #77

Earlier quoted context omitted.

That's completely unrealistic. There is very tight cooperation between the major currency blocks when it comes to the crackdown on anonymous payments and on everything anonymous for that matter.

No there isn't. Anonymous paper money is still used in every country in the world, anonymising P2P networks like Tor and I2P have not been outlawed, you can buy pre-paid VISAs and pre-paid phones legally and anonymously and many people send routinely anonymous donations to political organisations.

Some things are still possible for now. Others were banned internationally (e.g anonymous savings accounts) by exerting great pressure on countries that had these things. I think the direction is clear. My prediction is that in 10 years we will not be able to even connect to the internet without authentication.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#179

Post by Maxious »

quanticle wrote: post #118
weavejester wrote: post #96

Earlier quoted context omitted.

No there isn't. Anonymous paper money is still used in every country in the world, anonymising P2P networks like Tor and I2P have not been outlawed, you can buy pre-paid VISAs and pre-paid phones legally and anonymously and many people send routinely anonymous donations to political organisations.

you can buy pre-paid VISAs and pre-paid phones legally and anonymously I thought legislation had been passed stating that purveyors of pre-paid debit cards and cell phones had to ask for ID and keep records so that, if the cards or phones were used in a crime, the purchaser could be traced. I do know that legislation to that effect was introduced. I'm not sure if it was ratified, but even if anonymous cards and phone…

In Australia you need ID to get a pre-paid phone or SIM. Organised crime just imports their mobile connectivity from Mexico - the roaming fees are nothing to them. http://www.theage.com.au/national/bikies-trafficking-in-data...

Re: Online Cash Bitcoin could Challenge Governments, Banks

#180

Post by rick888 »

What's to stop someone from taking apart the software/building rogue software and generating their own bitcoins without going through any of the complicated math calculations?

If they can't, then there must be some central authority preventing this..which means it's no different than the government

It also doesn't really help with privacy. In fact, it does the exact opposite:

Taken from: http://www.bitcoin.org/smf/index.php?topic=5907.0

"Every bitcoin transaction ever made is public, and the life of every bitcoin is fully recorded in public for all to see,"

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