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Bitcoin & crypto?

Discussions about the economic and financial ramifications of PEAK OIL

Re: Bitcoin & crypto?

Unread postby evilgenius » Sat 30 Dec 2017, 11:58:40

SeaGypsy wrote:EvilG, I'm not up to date on the nitty gritty of US local government laws, but I'm pretty sure if you ask anyone in the building game they do have to pay substantial fees to block up public space. We certainly do in Australia.

That's what I'm hoping. But I really brought it up to make a statement about for whom taxes are taken. They are taken in the name of the public. The public is understood to be an accounting of persons where there is no respect for persons. The understanding has to be of the average person, not of the individual. We can easily derive the average person from the kind of information available to us. Alas, individuals fill out tax forms. They have a right to complain about it, usually protesting how little they are getting from the deal. They don't see themselves as members capable of participating in an average way. Their potential benefit doesn't always coincide with the bottom line. They want to manage the thing and make certain that it benefits them more than it doesn't, where it counts. They've realized the value of politics.
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Re: Bitcoin & crypto?

Unread postby careinke » Sat 30 Dec 2017, 16:49:02

Outcast_Searcher wrote:How does changing what we call the dollar and making it electronic and on a block chain change anything fundamental about available, wealth, resources, or the ability to solve problems?

Well, to start with you can't counterfeit it, it can be programed, and it solves the Byzantine Generals dilemma.

Are you implying they just make FEDCOIN and start spending it without collecting more taxes?

I think it is a better option than letting private banks make more dollars out of nothing like we do today.

If that's the case, inventing more free money sounds wildly irresponsible, given what's transpired in the past decade.

This is already being done with Federal Reserve Notes, unfortunately, it is being done in collusion with private banks. This makes it a Fascist system. Have you looked at the rise in number of Federal Reserve Notes? Talk about bubbles...

By the way, if taxes are revoked, it's not clear to me where the money comes from. Mining Fedcoin? Because if that's the plan, I don't think governements can arbitrarily manufacture wealth out of thin air and remain credible for long. I'm pretty sure the current Venezuela situation is an indication of where such schemes will lead.

What do you mean? Of course governments can arbitrarily manufacture wealth out of thin air, they already do this. What backs the dollar? The belief in the government? I prefer my currency to be backed by math. It's way harder to corrupt. Venezuela is more and example of the dollar than crypto currencies.


The current tax system: infringes on your privacy,' encourages government surveillance on your activites, forces the individual to spend additional monies and time to figure how much of your money the government should steal, allows lobbiests to buy tax advantages for their own interests, discourages saving (through the hidden inflation tax), and adds an increadable economic friction to the economy. The entire economic ecosystem is based on faulty math and is destained to fail.
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Re: Bitcoin & crypto?

Unread postby Outcast_Searcher » Sun 31 Dec 2017, 01:20:00

careinke wrote:
Outcast_Searcher wrote:How does changing what we call the dollar and making it electronic and on a block chain change anything fundamental about available, wealth, resources, or the ability to solve problems?

Well, to start with you can't counterfeit it, it can be programed, and it solves the Byzantine Generals dilemma.

Are you implying they just make FEDCOIN and start spending it without collecting more taxes?

I think it is a better option than letting private banks make more dollars out of nothing like we do today.

If that's the case, inventing more free money sounds wildly irresponsible, given what's transpired in the past decade.

This is already being done with Federal Reserve Notes, unfortunately, it is being done in collusion with private banks. This makes it a Fascist system. Have you looked at the rise in number of Federal Reserve Notes? Talk about bubbles...

By the way, if taxes are revoked, it's not clear to me where the money comes from. Mining Fedcoin? Because if that's the plan, I don't think governements can arbitrarily manufacture wealth out of thin air and remain credible for long. I'm pretty sure the current Venezuela situation is an indication of where such schemes will lead.

What do you mean? Of course governments can arbitrarily manufacture wealth out of thin air, they already do this. What backs the dollar? The belief in the government? I prefer my currency to be backed by math. It's way harder to corrupt. Venezuela is more and example of the dollar than crypto currencies.


The current tax system: infringes on your privacy,' encourages government surveillance on your activites, forces the individual to spend additional monies and time to figure how much of your money the government should steal, allows lobbiests to buy tax advantages for their own interests, discourages saving (through the hidden inflation tax), and adds an increadable economic friction to the economy. The entire economic ecosystem is based on faulty math and is destained to fail.


I guess I'm just slow or something, but I don't get it.

Just because crypto-currencies are based on fancy math and can be verified by block chains doesn't mean politicians cant deree more be used or competitors can't invent more. So to me, the idea that they're gold like by having a strongly controlled supply doesn't hold.

Second, just because we change the nature of the currency, it doesn't magically correct or even change the fundamental nature of taxation and all its problems. Not does it fundamentally change the nature of the economic ecosystem or anything else fundamental about economics, the problems of the world, etc.

By the way, how can crypto claim to be fault tolerant even as Bitcoin has had multiple hacks of exchanges where people have (in aggregate) lost huge amounts of bitcoin, multiple times? Maybe insuring it like the FDIC insures bank deposits will help, but this sounds more to me like bitcoin fanboi mantra than some huge bitcoin advantage.
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Re: Bitcoin & crypto?

Unread postby tita » Sun 31 Dec 2017, 09:01:11

What amaze me is the argument that bitcoin will free people from the evil power of banks and governments. Just a way to solve an economy that have gone sick.

What backs any currency is the ability to pay back the debts that created the money. The money created is used in the exchange of good and services. What backs the dollar are the assets that were bought against the debt, and produces wealth.

There is nothing behind the bitcoin outside the blockchain technology... Which is certainly useful for something... But not for a tool of speculation.

The people mining bitcoin probably got a loan from a bank to start their activity. This loan was created out of thin air by the bank. At some point, miners have to pay back the loan, and pay their electricity bills, using fiat currencies as nobody actually accept bitcoin as payment. Only those who want to stay hidden and a few merchants, which convert immediately the payment into fiat currencies, accept bitcoin. Outside this, there is only speculation based on vague ideas that bitcoin will become something necessary.

What happens if the pool of miners increases with the value of bitcoin, increases the amount of money burned in the electricity and computing infrastructure that is payed by the speculation on bitcoin, and suddenly the bitcoin fall a lot? At this point, miners will just go bankrupt and amplify the fall. This is not different than the false value that was created through the housing bubble or any other bubble.

Currencies are tools for exchange, and valued over the exchange that are made.
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Re: Bitcoin & crypto?

Unread postby SeaGypsy » Sun 31 Dec 2017, 10:05:34

There's among the noise a lot of bleating about bitcoin being invulnerable to hyperinflation in the way central bank fiats are. However there is a minimum amount of these currencies, called 1 cent, 1 peso etc while the most recent division of bitcoin was to 1 Satoshi- .00000001 bitcoin- a few hours ago $1 (100 cents) was worth about 10,000 Satoshi, so currently the minimum trade in bitcoin is about 100th of 1 cent. Add another decimal point, or a few more- nobody can say you can't if you made the currency- a capped amount of which is meaningless, because there is virtually infinite divisibility.
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Re: Bitcoin & crypto?

Unread postby careinke » Sun 31 Dec 2017, 15:59:02

SeaGypsy wrote:There's among the noise a lot of bleating about bitcoin being invulnerable to hyperinflation in the way central bank fiats are. However there is a minimum amount of these currencies, called 1 cent, 1 peso etc while the most recent division of bitcoin was to 1 Satoshi- .00000001 bitcoin- a few hours ago $1 (100 cents) was worth about 10,000 Satoshi, so currently the minimum trade in bitcoin is about 100th of 1 cent. Add another decimal point, or a few more- nobody can say you can't if you made the currency- a capped amount of which is meaningless, because there is virtually infinite divisibility.


That's the point. So if you hold (save) your cryptocurrency, it appreciates. If you hold FRNs they depreciate. Two different designs of stored value.
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Re: Bitcoin & crypto?

Unread postby evilgenius » Mon 08 Jan 2018, 12:20:58

I think more what values any currency are the promises to pay back the money that has been borrowed, than the ability to pay it back. The system allows for varying assessments of ability. Lenders are allowed to look at collateral in a variety of ways. There is only one promise.
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Re: Bitcoin & crypto?

Unread postby Outcast_Searcher » Mon 08 Jan 2018, 13:22:22

evilgenius wrote:I think more what values any currency are the promises to pay back the money that has been borrowed, than the ability to pay it back. The system allows for varying assessments of ability. Lenders are allowed to look at collateral in a variety of ways. There is only one promise.

So is the value of cryptocurrencies backed outside of futures contracts?
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Re: Bitcoin & crypto?

Unread postby careinke » Mon 08 Jan 2018, 14:31:09

Outcast_Searcher wrote:
evilgenius wrote:I think more what values any currency are the promises to pay back the money that has been borrowed, than the ability to pay it back. The system allows for varying assessments of ability. Lenders are allowed to look at collateral in a variety of ways. There is only one promise.

So is the value of cryptocurrencies backed outside of futures contracts?


Yes, It's backed by: math, not having to trust middlemen, and inability to corrupt the data.
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Re: Bitcoin & crypto?

Unread postby evilgenius » Tue 09 Jan 2018, 12:39:33

careinke wrote:
Outcast_Searcher wrote:
evilgenius wrote:I think more what values any currency are the promises to pay back the money that has been borrowed, than the ability to pay it back. The system allows for varying assessments of ability. Lenders are allowed to look at collateral in a variety of ways. There is only one promise.

So is the value of cryptocurrencies backed outside of futures contracts?


Yes, It's backed by: math, not having to trust middlemen, and inability to corrupt the data.

Like anything of value, it's backed by the faith of the people. There are underlying conditions governing every kind of asset. In the case of crypto, those conditions assure people about the supply of coins. People seem to think, like they do with gold being limited in supply by its frequency in nature, that makes it valuable. Also, unlike gold, crypto is storage friendly. You have to protect gold much more than you have to watch out for something happening to your bitcoins.

The trouble with both gold and crypto is that they are not tied in their underlying conditions to the economic activity of the people, like fiat currencies are. Unless something happens to derail the viability of fiat currency, it will always be the master holding the stick, and crypto the dog chasing it. Fiat can shrink as well as grow in supply. It responds to how well people keep their word over paying back their debt. Amazingly, if fiat operates in a sea of bad debt, the value of it goes up because the supply of it goes down. It's only when conditions of hyper-inflation prevail, which is when people lose faith in a fiat currency altogether, that crypto can achieve some edge. It's possible for some world wide economic catastrophe to cause that kind of a loss of confidence across all currencies, but very unlikely. War could do it. Some sort of horribly bad management of money across all central banks might too. AI could do it by putting so many people out of work that debts going forward can't be repaid. Then there are all of the conspiracy theorists, and their ever morphing theories. They could play some role in a crisis over fiat money as well. They could convince people, like they did offering up Trump as president, that fiat money is some kind of bad thing.
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Re: Bitcoin & crypto?

Unread postby onlooker » Tue 09 Jan 2018, 17:46:11

The enthusiasm is not fading
Kodak soars on crypto-currency plans
http://www.bbc.com/news/technology
The Big Economic Plunge is approaching
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