Yup. And what makes the USD valuable is the fact that the first group are isolated nutbars and the second group make up well over 99% of the population of the United States and a measurable fraction of the world population.
Which means, in turn, that if I should find myself in possession of a USD, I can be assured of being able to trade it to someone for something I actually want without too much effort. Which is to say, it has value to me.
Note that the official position of the United States has nothing to do with that; I probably will not, in fact, give the dollar to the United States goverment, but I will still find it useful and therefore valuable.
Those people are also often business owners in other nations with robust economies. There's actually a lot of places that don't accept USD in the post-industrialized world, despite its prevalence. Which is completely irrelevant unless you travel a lot.
Now, if the U.S. government decided tomorrow to switch to an electronic currency... do you really think your dollar will still have value as anything more than a collectible? It's like the Euro situation, where a lot of currencies became worthless because governments decided to switch.
Because Zimbabwe is one actor among many, and a relatively small one at that. Because while the Zimbabwe government would accept the currency, almost no one else would. If I should find myself in possession of a large number of ZWD, I wouldn't be able to trade them for something I wanted except by going to tremendous trouble. Even when the government was still accepting them.
Which of course is tautological. No one wanted a ZWD because no one believed that anyone else (except the Zimbabwean government) wanted a ZWD. But this kind of tautology becomes a self-fulfilling prophesy.
And the high corruption in the Zimbabwe government and resulting massive levels of distrust had nothing to do with that?
WRONG! It doesn't matter what the minter's word is worth, since I'm highly unlikely to deal directly with the minter. What matters is whether the people that I deal with on a regular basis will accept (and value) the currency. The US dollar is valuable in part, not because the US government stands behind it, but because Exxon will only accept payment in US dollars, and so I need USD to buy gas and oil for my car. The US dollar is valuable because banks (including many foreign banks) will accept payment in US dollars, even if they won't touch the local currency. The US dollar is valuable because I can go into a village in Zimbabwe and give the barman a dollar, and he'll give me a beer in exchange.
This African barman doesn't care about the US government and will never deal with it. But he knows that he can turn around and give that dollar to the butcher for a chicken, and the butcher will accept it because he knows that he, in turn, can use it to buy soap at the local store.
Basically, I value a USD because the people around me -- and in fact, almost everyone else in the world -- value them.
Which gets back to the point I made earlier -- there are numerous historical examples where the money of failed or non-governments continued to circulate and indeed to be preferred to the money of current governments. How can the "word" of a non-existent entity be any good?
Actually, Exxon accepts Euros, pounds, and quite a few other currencies. They only require dollars in the U.S. because it's the standard currency.
Also, Zimbabwe is a nation where people don't trust their government, to the point the national currency failed to catch on. It really is a bad example.
As for those other currencies: They kept being accepted because people trusted the word of those who put them out that the currency was valuable, even over the word of less-trustworthy governments that came later. This is a known phenomenon. In fact, the U.S. actually has two legal currencies called the dollar because the U.S. government still considers the gold-backed dollar as legal tender, despite the fact you can no longer trade it for gold.
As for how the word of a non-existent entity be any good: That's a psychology question, and gets a bit into the study of religion (according to what some have to say about religion). Pretty much, a word can be good because people trust it... even if the entity that gave the word is no longer around. After all, that's the basis of how several religions stick to their holy texts.
And, actually, there are several places that don't use the USD (Europe comes to mind). They're primarily in nations with strong economies that have their own currencies or which have converted to the Euro; in those places, the USD is limited to places that see a lot of tourism.
The Treasury Department literally prints money, it only at the behest of the Federal Reserve. Which is not part of the executive branch, or any other branch of the government.
Seriously, MJ, find whoever taught you monetary theory and demand an apology.
You mean the same Federal Reserve that only exists because Congress passed the Federal Reserve Act and which regularly reports to and is overseen by Congress? And which has its leadership appointed by Congress and the President?
They're like the ESRB; they're not an official government agency, but they're pretty much treated as one by the federal government (there's been attempts to mandate that all video games must have ESRB ratings or not be allowed to be sold in the U.S. within Congress). It's a weird system in place, but it works for the U.S.
You mean the same Federal Reserve that only exists because Congress passed the Federal Reserve Act and which regularly reports to and is overseen by Congress? And which has its leadership appointed by Congress and the President?The Treasury Department literally prints money, it only at the behest of the Federal Reserve. Which is not part of the executive branch, or any other branch of the government.
Seriously, MJ, find whoever taught you monetary theory and demand an apology.
Like all central banks it was created by a government. The board of governors is a federal agency and they are appointed to 14 year terms by presidential nomination and senatorial confirmation. They are notoriously resistant to influence and control by either the President or Congress. The governors decide policy and provide oversight to the individual federal reserve banks, who enact that policy and are turn formally owned by and pay a statutory dividend to the member banks.
The Fed is as politically independent as any major central bank in the world.
Get into the bits about oversight, reporting, and ability of Congress to take away the power of the Federal Reserve that are within the Federal Reserve Act. While it is politically neutral, I do not think the sheer amount of oversight it faces or the fact Congress can take away it's power brings into question how independent it is. Plus, while they mandate the Treasury printing money, they actually have no control over what that money looks like; Congress approves that. There's also the fact that the justification for the Federal Reserve Act is that the Federal Reserve is acting as a proxy for Congress and that Congress still retains the actual power.
They're like the ESRB; they're not an official government agency, but they're pretty much treated as one by the federal government (there's been attempts to mandate that all video games must have ESRB ratings or not be allowed to be sold in the U.S. within Congress). It's a weird system in place, but it works for the U.S.Please tell me you're joking here.
I wish I was. That's not the first time that bill has come up, either; it's just the latest.
People said the same thing about online shopping when the early hacks of online stores happened.
That is a false equivelancy. Whether people conduct business in person, by phone, by mail or electronically is all the same, and there is opportunity for theft and deception regardless of the medium, and there always has been. I am certainly not a technophobe or luddite by any stretch of the imagination.
The question around Bitcoin is not if a private company (and by extension the population engaged with its secure and maintenance through wallets,mining, etc.) CAN make and carry out a viable currency, the question is whether or not they SHOULD.
I believe in a very limited role for governments (at all levels). There are only two things they should do. 1) Governments should do the things that only governments can do (and need to be done). 2) Governments should do the things that only governments should do (and need to be done).
To my mind, currency development and maintainence is a clear category of something that must be done and only the government should do it.
Bitcoin is not filling a need that was going unfulfilled. We have been transacting online exchanges for decades now using dollars, pesos, francs, euros, etc. We have a system in place for currency exchanges for international transactions that works. I will admit that it is not without faults including corruption, but Bitcoin certainly won't solve that and has to potential to create new problems.
The question around Bitcoin is not if a private company (and by extension the population engaged with its secure and maintenance through wallets,mining, etc.) CAN make and carry out a viable currency, the question is whether or not they SHOULD.
Except that isn't the question at all, because Bitcoin is an open source protocol developed by an anonymous dude and utilized in an utterly decentralized fashion. There is no company that created it, and there is no company that maintains it.
Get into the bits about oversight, reporting, and ability of Congress to take away the power of the Federal Reserve that are within the Federal Reserve Act.What, you mean that the Chairman has to make a yearly (more or less) report to Congress? That Congress reserves the right to amend or repeal the act? You have a truely bizare view of whaat those paragraphs mean in the real world.
While it is politically neutral, I do not think the sheer amount of oversight it faces or the fact Congress can take away it's power brings into question how independent it is.It is independent. Even though congress could repeal the law or amend it to let them fire governors or whatever else, any sustantive changee would massively harm our economy and pretty much get whoever voted for it tossed out next election.
Plus, while they mandate the Treasury printing money, they actually have no control over what that money looks like; Congress approves that. There's also the fact that the justification for the Federal Reserve Act is that the Federal Reserve is acting as a proxy for Congress and that Congress still retains the actual power.Complete word salad.
What the money looks like is meaningless. Hell, the actual printing and minting is meaningless since almost all of the USD in existence are just numbers. Well, technically its appearance has a slight effect on it's value due to anti-counterfeit measures, but those are pretty much rubber stamped by congress and come from the Secret Service and Treasury. The Fed controls monetary policy though, which is where the real value of the currency is determined.
It makes its decisions on its own and pretty much ignores congressional and presidential whinging and gnashing of teeth. Sure, it answers questions when congress asks them, but its never changed its policies because the president or congress stamped their feet.
The justification for the act is the gosh darn title.
"An Act To provide for the establishment of Federal reserve banks, to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes."
Funny that.
Or maybe I realized what you said doesn't match what Congress had to say about oversight and the fact that that they are justifying its existence using the Constitution. And as far as I can find, they still use that paper for new members. Here's the introduction of the paper I linked to:
Although the Federal Reserve—our Central Bank (or monetary authority)—is one of the country’s most powerful economic institutions, it is also one of the most misunderstood. For Congress, the Federal Reserve is relevant because (1) the U.S. Constitution (Article I, Section 8 ) explicitly gives Congress the power over money and the regulation of its value and (2) this responsibility was delegated by Congress to the Federal Reserve; the Federal Reserve was created by an act of Congress. Accordingly, Congress has important responsibilities for overseeing the Federal Reserve and monetary policy.
This paper provides a brief overview of what (and why) Congress should know about the Federal Reserve. A broad-brush overview, it is intended to lay the groundwork for several subsequent papers addressing issues related to congressional oversight of Federal Reserve monetary policy and the goal of price stability.
In other words, Congress itself justifies the existence of the Federal Reserve as an extension of their power and maintains oversight of it. And if you want some fun to see how much of an oversight Congress keeps, you can read the testimony of the Chairman Bernanke of the Federal Reserve before Congress. In particular, I found these bits of his testimony interesting:
Chairman Bernanke. Well the Fed is doing what Congress told it to do, which is we are doing our best to try and promote maximum employment and price stability.
Congress needs to take a longer view. It is true that interest rates are quite low today, and therefore the interest burden today is quite low. But when the CBO scores budget plans out for a decade or two decades, it assumes that interest rates are going to rise, which we hope they will because that will be a suggestion that the economy is recovering and coming back to normal.
So in looking at those 5, and 10, and 20 year budget plans, they assume higher interest rates. And you are going to have to deal with higher interest rates at some point, we hope, as the economy strengthens. And so I very much support your suggestion of having a longer horizon.
I think it is important for Congress to look at the 5- and
10-year window and look at how interest rates are expected to
move, and make decisions based on that.
Several times, when discussing monetary policy, he discusses it in relation to Congress's actions. At one point someone mentions Congress changing the mandate of the Federal Reserve and Betnanke tries to argue against it. They also discussed changing the structure of it, along with a lot of discussion of Congressional fiscal policy and how it affects the actions the Federal Reserve can take.
Here's the testimony where he argues against changing the mandate:
Chairman Bernanke. Well first let me say that of course Congress
sets the mandate for the Federal Reserve, and so Congress has the right to set the mandate of course any way it likes. My own personal view is that we have been able to help on the employment side, and that the dual mandate has served us well since the mid- 1970s when it was first incorporated. So I would recommend that you stay with that. But again, Congress certainly is able to make that decision if it wishes.
I would point out that even though we have a dual mandate, that inflation if anything is a little bit too low. Inflation has been very
low. The dollar has been strong. We have not in any way failed on that responsibility.
So I think it is consistent with our mandate and with our current policy to maintain price stability, and that is what we have been achieving.
Where is the definition of what the mandate is given? Much earlier, by Bernanke, with this paragraph:
With unemployment well above normal levels and inflation subdued, fostering our Congressionally mandated objectives of maximum employment and price stability requires a highly accommodative monetary policy.
That entire set of testimony is not the testimony of a politically-independent organization. It's the testimony of a government organization that is having to report to its bosses. You see similar testimony given by the IRS, FBI, Homeland Security, and others.
And as for not changing its policies: As Bernanke noted, Congress sets the mandate. If they wanted to change the entire way the Federal Reserve operates, there's nothing the Reserve can do about it.
Now, some might accuse me of cherry-picking quotes; they're right. I didn't want to post the hundred or more lines of text that back my stance from that testimony and cherry-picked the most obvious quotes.
No, I was hoping you were joking about comparing the US central bank with the ESRB. It's such a ludicrous statement it it pretty much prevents us have having a rational discussion about it.
Again, find whoever taught you how US central banking, the Federal Reserve Act, and monetary policy - heck, how currency systems in general - work and demand an apology and, if applicable, a refund. They did you a massive disservice in explaining how any of this works.
I was not really intending to compare them; I was intending to show two organizations with somewhat similar relationships to the U.S. government in terms of official vs. unofficial status. However, even then, the two are not that similar. So, it really was a bad analogy. I admit that.
As for needing a refund on it: Well, either they should also be giving refunds to both Congress and the Federal Reserve in addition to me, or someone did not teach you how the federal government actually works. Because so far, you have myself, the Chairman of the Federal Reserve, and the Joint Economic Committee of Congress not understanding the Federal Reserve to actually be an independent organization.
People said the same thing about online shopping when the early hacks of online stores happened.That is a false equivelancy. Whether people conduct business in person, by phone, by mail or electronically is all the same, and there is opportunity for theft and deception regardless of the medium, and there always has been. I am certainly not a technophobe or luddite by any stretch of the imagination.
The question around Bitcoin is not if a private company (and by extension the population engaged with its secure and maintenance through wallets,mining, etc.) CAN make and carry out a viable currency, the question is whether or not they SHOULD.
I believe in a very limited role for governments (at all levels). There are only two things they should do. 1) Governments should do the things that only governments can do (and need to be done). 2) Governments should do the things that only governments should do (and need to be done).
To my mind, currency development and maintainence is a clear category of something that must be done and only the government should do it.
Bitcoin is not filling a need that was going unfulfilled. We have been transacting online exchanges for decades now using dollars, pesos, francs, euros, etc. We have a system in place for currency exchanges for international transactions that works. I will admit that it is not without faults including corruption, but Bitcoin certainly won't solve that and has to potential to create new problems.
Actually, it's not a false equivalency. For one thing, people will also move currency no matter where it is, and online currency of any type (even real currency) is prone to being stolen by hackers. Secondly, as Scott Betts pointed out, this is not a currency being made by a singular company, but by a lot of individuals; this is similar to the beer bottle cap currency that popped up in Camaroon. Finally, a private company making its own currency is actually legal; if it wasn't legal then the people who made Second Life would be in a massive amount of trouble (their currency even has an exchange rate with USD that fluctuates). In fact, the U.S. government has actually been considering, for years, the possibility of virtual currencies being taxable. In addition, a court of law ruled the Bitcoin is a currency.
Actually, it's not a false equivalency.People said the same thing about online shopping when the early hacks of online stores happened.That is a false equivelancy.
No, it is a false equivalency, but you missed the reason why it's a false equivalency.
Online shopping provided a new and disruptive service that lots and lots of people wanted, even if there were a few kinks in working stuff out.
Bitcoin does not. As you point out, it's a currency (and a currency that can be transferred electronically). Which makes it just like every other currency in the world. Like most of the other currencies in the world, it's got an extremely small user base, an extremely volatile exchange rate against the world's goods and services, and no backing by anything sensible.
So anything that you can get from Bitcoin, you can also get from the Albanian lek or the Ghana cedi. Except, of course, that Bitcoin is also designed to be deflationary, which will automatically destroy any economy that relies upon it.
So, basically, using Bitcoin gives you almost as much as you would get from using the Ghana cedi.
Except, of course, that the Bitcoin is also demonstrably subject to a number of electronic and cryptographic security threats that the cedi is not subject to.
So the Bitcoin is less useful than the cedi while being substantially more risky.
Actually, it's not a false equivalency.People said the same thing about online shopping when the early hacks of online stores happened.That is a false equivelancy.No, it is a false equivalency, but you missed the reason why it's a false equivalency.
Online shopping provided a new and disruptive service that lots and lots of people wanted, even if there were a few kinks in working stuff out.
Bitcoin does not. As you point out, it's a currency (and a currency that can be transferred electronically). Which makes it just like every other currency in the world. Like most of the other currencies in the world, it's got an extremely small user base, an extremely volatile exchange rate against the world's goods and services, and no backing by anything sensible.
So anything that you can get from Bitcoin, you can also get from the Albanian lek or the Ghana cedi. Except, of course, that Bitcoin is also designed to be deflationary, which will automatically destroy any economy that relies upon it.
So, basically, using Bitcoin gives you almost as much as you would get from using the Ghana cedi.
Except, of course, that the Bitcoin is also demonstrably subject to a number of electronic and cryptographic security threats that the cedi is not subject to.
So the Bitcoin is less useful than the cedi while being substantially more risky.
Except the Bitcoin offers the potential service of, if it is accepted enough, being a unified currency accepted anywhere; this is part of the same rationale that led to the Euro.
And the only way the Ghana cedi is immune to those risks is if it's never transferred electronically; if it is, the same security compromises that can affect a Bitcoin can also be added to the packets of data dealing with cedi transactions. It's one of the reasons why banks invest so much money in cybersecurity.
Edit: And it just occurred to me that you could post about the problems the Euro has, point out the fact the Bitcoin uses less security than banks do, or argue that the bank transactions involve less risk due to all of their security. All of why are arguments I cannot disagree with. I am not going to say the Bitcoin is without problems; if it wasn't, it would have been more successful when first introduced.
Has anyone said buttcoins yet
Back cover of Cyberpirates (a Shadowrun sourcebook)
Runners may rule the streets
but pirates rule the seas.
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Except the Bitcoin offers the potential service of, if it is accepted enough, being a unified currency accepted anywhere; this is part of the same rationale that led to the Euro.
So does the US dollar, or the Euro. The only new thing Bitcoin offers is anonymity, and even that is not as true as you might think. And there is no demand for Bitcoin among most people because anonymity is not valuable. You argue that if it becomes accepted it becomes valuable, but there is no reason for the average person to accept bitcoin. Its value is only what other people are willing to pay for them in goods, services, or other currencies and your average person is not willing to give them for bitcoins because the people around them they need to trade with also don't care about bitcoins. They have to convert them through an intermediary, they have to spend effort to set up the ability to receive them, and very few are going to want to do that unless they see there is demand for them to.
So, there is no demand for their uniqueness, and therefore people wont use them. Because people don't use them, businesses wont spend the effort to support them. Because businesses wont support them, people wont care about them, leading us back to the beginning.
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Except the Bitcoin offers the potential service of, if it is accepted enough, being a unified currency accepted anywhere; this is part of the same rationale that led to the Euro.
So the Bitcoin is less useful than the cedi while being substantially more risky.
Oddly enough, this is also true of the Ghana cedi. IF enough people wanted the cedi, it would be a universal currency accepted anywhere, more or less by definition. Rather like the status that the US dollar actually enjoys today.
So once again, the Bitcoin proves to have no advantage over the Ghana cedi, and substantial weaknesses.
Caineach and Orfamay, I went ahead and favorited your posts. I can't disagree with what either of you said.
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Caineach and Orfamay said it well.
Just to respond to a couple of things earlier.
When I mentioned "a private corporation" running Bitcoin, I was speaking too loosely and generally. I do recognize that Bitcoin is open source software, and the bit mining process uses computers from around the world as an audit process, etc. And I know that the corporations involved in the process are mostly just exchanges for buying and selling Bitcoins. While I do think it would only have been a matter of time before Bitcoin exchanges were bought up by a couple of corporations if it continued to gain momentum, what I should have said is that I don't believe that the administration of a currency should be in private hands, whether that be a for-profit companies, a non-profits, groups of citizens, etc.
And regarding the court case where an alternative currency was upheld... Well, the system is not perfect. Just because a court (even the Supreme Court) allows something, it doesn't mean that it is necessary constitutional, right and/or just. I would point to the courts upholding that a corporation is a person. That is patently absurd. A corporate is a legal construct and nothing more.
This is the same system where they're considering what kinds of video game currencies are taxable income and where politicians bring the entire government to a screeching halt out of pure ego. The fact corporations are ruled as persons just is part of the absurdity that the entire American government has become.
It frustrates me. But it is the system in place, and the one we have to deal with.
Oh, and a favorite, since I can't disagree with what you said.
This is the same system where they're considering what kinds of video game currencies are taxable income and where politicians bring the entire government to a screeching halt out of pure ego. The fact corporations are ruled as persons just is part of the absurdity that the entire American government has become.
It frustrates me. But it is the system in place, and the one we have to deal with.
Oh, and a favorite, since I can't disagree with what you said.
Honestly, video game currencies being taxable is not entirely unreasonable. They have exchange rates with physical monies, and, for a couple years, WoW gold was one of the most stable currencies in the world. The only thing that really prevents them from being a commodity you can produce is the fact that the exchange for gold into cash is against the Terms of Service.
Now that I'm thinking it over more, I think WoW gold may be a more valid currency than bitcoin. It has a wider user base, probably has more demand, and it actually has a governing body that requires its use.
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When I mentioned "a private corporation" running Bitcoin, I was speaking too loosely and generally. I do recognize that Bitcoin is open source software, and the bit mining process uses computers from around the world as an audit process, etc. And I know that the corporations involved in the process are mostly just exchanges for buying and selling Bitcoins. While I do think it would only have been a matter of time before Bitcoin exchanges were bought up by a couple of corporations if it continued to gain momentum, what I should have said is that I don't believe that the administration of a currency should be in private hands, whether that be a for-profit companies, a non-profits, groups of citizens, etc.
Meh. First, the Bitcoin protocol itself is open-source, so there's literally nothing to buy. If I wanted to buy MtGox, the company, I could probably do so (and right now, I could do so for the price of a sandwich), but that wouldn't give me control over Bitcoins any more than buying McDonald's would give me control over hamburgers. People could still mine them, exchange them, redeem them, whatever.
Second, I'm not sure who you think should be administering a currency, but the track record of governments administering currencies is not exactly 100% either. Basically, people are a problem. In that sense, Bitcoin is ahead of its time in that it's administered by mathematics, not people. The problem is that its administration is by design deflationary and hence self-destructive, not exactly what you want to base a currency on.
The problem with Bitcoin, IMHO, isn't that it's a private currency. It's that it's a badly designed private currency. The cryptography works well. The implementation of exchange mechanisms mostly work. The economics is fundamentally broken beyond repair (not surprising, as it was designed by Randroids who are not on friendly terms with economics).
In the long run, the failed economics will kill Bitcoin. In the medium run, the fact that the protocols have been badly implemented will kill Bitcoin before the economics can. In the short run, the fact that everyone who approves of Bitcoin is either a criminal or an idiot will kill Bitcoin before the bad implementation does. Right now, Bitcoin exists as a protocol to transfer wealth from gullible fools to technologically sophisticated criminals.
With a government in control of a currency -- or more accurately, with a government in control of a banking system -- one can at least create proactive controls such as the FDIC to force currency exchanges to include appropriate security protocols and to indemnify clients against incompetence or misfeasance on the exchanges. When someone steals money from a bank, the insurance company steps in to make me whole, and banks are required to purchase that insurance. When MtGox loses $400 million dollars,.... that's unfortunate.
That's basically what saved on-line purchases as well. Once credit card companies and online merchants realized that they could make more money by offering risk-free purchases than they would lose to fraud, the e-conomy really took off. When MtGox figures out how to get insurance against the possibility of a billion-dollar theft, while at the same time telling the insurers nothing about their clients that would make a risk assessment possible, Bitcoin may become practical.
Don't hold your breath.
Ignorance of what a bitcoin is aint helping
It's the TSA. They think liquid baby formula is an explosive. I kinda suspect they're secretly lobotomizing their agents during training.
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This is the same system where they're considering what kinds of video game currencies are taxable income and where politicians bring the entire government to a screeching halt out of pure ego. The fact corporations are ruled as persons just is part of the absurdity that the entire American government has become.
It frustrates me. But it is the system in place, and the one we have to deal with.
Oh, and a favorite, since I can't disagree with what you said.
yeah but we once had a lawmaker trying to figure out how to tax a backyard garden, since those veggies are "income"
Today's news. MtGox filed for bankruptcy. Depositors are out on the order of a half b-for-billion dollars.
Banks filing for bankruptcy is, of course, nothing new. But one of the major points of the banking reform of the 1930s was to create some form of consumer protection; even if your bank crumpled, you would still get your money back, courtesy of the payments that the banks made (as in, were obliged to make) into the insurance fund. "Since the FDIC was established in 1933, no depositor has ever lost a single penny of FDIC-insured funds."
Think about this before you start asking for an Ayn Rand government-free currency and banking system.
Note that the FDIC won't protect people from being out half a billion or more if a bank goes under; it has an upper limit on what it insures. It just makes certain you don't lost everything.
Which is one protection problem the Bitcoin will never solve; it loses all value or its banks go under, you're just out of luck.
Which is also why any same financial planner and most banks trek you to keep your accounts under the insurance cap, even if that means splitting your assets between multiple institutions.
Which is a good idea anyway.
For the vast majority of people, that's not something to worry about.
As the wag said, "I should have such problems".
Even for most people with enough money to be concerned, most of it will be invested somewhere with hopes of getting better returns than an insured deposit account.
Like a hedge fund. I hear those are pretty safe.
This is the same system where they're considering what kinds of video game currencies are taxable income and where politicians bring the entire government to a screeching halt out of pure ego. The fact corporations are ruled as persons just is part of the absurdity that the entire American government has become.Corporate personhood is older than the United States of America.
I'm not the one who brought it up as absurd. The post just above mine did as part of an argument that the courts are making absurd decisions.
This is the same system where they're considering what kinds of video game currencies are taxable income and where politicians bring the entire government to a screeching halt out of pure ego. The fact corporations are ruled as persons just is part of the absurdity that the entire American government has become.Corporate personhood is older than the United States of America.
Still, that doesn't necessarily make it constitutional, right or just. Even if American constitutional legal system determines that it is legal, it doesn't mean it should be.
Sorry about the derail; I had just thrown that out there as an example to try and make my view on legal decisions more clear. It wasn't intended to drift us off topic.
Sorry about the derail; I had just thrown that out there as an example to try and make my view on legal decisions more clear. It wasn't intended to drift us off topic.
It's actually a pretty good example, unfortunately. What it indicates is that there a lot of people out there (and on this forum) taking very strong political opinions without mastering the necessary facts first. Bitcoin is a good example (no one on this thread who supports Bitcoin seems to actually either how it works or how macroeconomics works), but "corporate personhood" is another example.
Here's a question: How many of us talking about Bitcoin are people who support it?
I'm not. But, then, I also tend to resist certain trends of societal change. Like Facebook becoming so prominent.
Here's a question: How many of us talking about Bitcoin are people who support it?
I'm not. But, then, I also tend to resist certain trends of societal change. Like Facebook becoming so prominent.
Since I think it is the new (dot)com scam or the equivalent of Tulip Mania, no I don't support it.
Since I think it is the new (dot)com scam or the equivalent of Tulip Mania, no I don't support it.Here's a question: How many of us talking about Bitcoin are people who support it?
I'm not. But, then, I also tend to resist certain trends of societal change. Like Facebook becoming so prominent.
Tulip Mania doesn't inherently mean that tulips are bad, just they aren't really a good vehicle for investment.
Here's a question: How many of us talking about Bitcoin are people who support it?
For the moment, it appears to be more of a solution in search of a problem than anything else. There may come a point when it finds a real purpose, but that point isn't here yet.
Here's a question: How many of us talking about Bitcoin are people who support it?For the moment, it appears to be more of a solution in search of a problem than anything else. There may come a point when it finds a real purpose, but that point isn't here yet.
TBH, I thought the purpose of Bitcoin was "lets find a way for those of us in at the beginning to mine free money with this algorithm, and then persuade everyone else it's a viable currency so we can spend the cash we just 'printed'"
I support bitcoin. I use it in transactions. Bitcoin is a market currency. Bitcoin is simple to exchange. Bitcoins are conflict of interest free.
Mt Gox:
dollar << bitcoin < silver < gold
i didn't completely understand the aluminum argument, but when I do I'll fit that into the above.
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I support bitcoin. I use it in transactions. Bitcoin is a market currency. Bitcoin is simple to exchange. Bitcoins are conflict of interest free.
And thank you for so eloquently proving my point.
FDIC insurance creates a conflict of interest. If I know my btc are safe where ever I store them, I wouldn't do any research on where to put them. The bank also has the ability to loan out crazy percentages of stored assets with the "well the FDIC will come in and save us if there's a bank run".
This is errant nonsense. The FDIC doesn't save banks, it saves customers. If you're the owner of the Third National Bank and you go out of business, the FDIC won't lift a finger to save you. You're still in the same amount of trouble in bankruptcy court you would have been otherwise.
And, in fact, you have it the risks completely backwards. MtGox can do anything it likes with the bitcoins entrusted to them, including steal them (as we've seen),... but also lending them out to generate profit for themselves. Banks, because of the regulations, are actually limited in the amount they can lend out and the amount of leverage they can assume -- MtGox has no such limitations at all. And in the longer run, MtGox would more or less have to do this, because otherwise they're leaving money on the table and either unable to support the server farm or shamelessly overcharging their customers.
So, "no one on this thread who supports Bitcoin seems to actually understand either how it works or how macroeconomics works." And we've got a live spotting here.
Hi Orfamay,
I think we have a fundamental difference of opinion. You seem to think that government regulations are superior to the functioning of currency exchange than the market. (Correct me if I'm wrong) I enjoy and support BTC because it is free from regulations that I see as inferior to market forces.
Yes the FDIC saves assets of bank customers, and apparently the government can bail out the banks when they fail. I don't see that being "nonsense". That is a conflict of interest. Mt. Gox and it's successors know if they fail they fail. So do the customers. With banks I know my assets are backed up and the bank itself may get a handout if it makes any bad decisions.
-KZ