Bitcoin Central Is Now Licensed To Operate As A Bank



I suggest you read multiple books about the same subject(s) from authors with varying ideological backgrounds. It's pointless to understand a theory if you don't understand the major arguments against it. The study of economics itself is largely manipulated and skewed. Take it from an econ grad student -- one perspective is not enough when you have such large-scale conflicts of interest as McGraw-Hill publishing all the econ textbooks while being responsible for popular credit/security ratings through S&P.
 
Thanks Guerilla, I'm going to make some time this week to check out what you posted. Mises is easily available on the Kindle store and it's no problem if he's thick, I read some fairly thick stuff for fun (and to keep my brain in shape after a day's work writing web content) and will read multiple times if I need to. Tried to rep you but you're apparently the person I repped last time I repped.
 

It's a bit of a stretch to compare economic theories to theories in physics, especially because of the experimental nature of physics, but I'll bite anyway. Care to explain how general relativity and the laws of quantum mechanics reconcile? General relativity will not stand forever because of shortcomings and incompatibility with quantum mechanics. It will be built upon and replaced by a more precise and accurate theory like Newton's universal law of gravitation was by Einstein's general relativity. Perhaps the word, "pointless" was too extreme, but my point still stands. If you don't understand the shortcomings and incompatibilities of a theory then you don't fully understand it.
 
If you don't understand the shortcomings and incompatibilities of a theory then you don't fully understand it.
That's not what you wrote.

It's pointless to understand a theory if you don't understand the major arguments against it.
It is not pointless, it is not without utility, and it is not even necessary to understand the major arguments (should they even exist).

Sorry to be pedantic, but you were wrong. I get what you're saying about looking at different points of view, but no number of points of view invalidate a truth, and so if the theory you're looking at is sound, then it wouldn't matter if there were zero or 100 billion opposing points of view.

In fact, given the fact that studying alternative points of view comes at a cost, you could probably make the case that the more alternative points of view you consider in depth, the lower your overall utility/efficiency.

I come at all of this stuff from a perspective rooted in a priori, not a posteriori analysis. When you're thinking this way, you don't require all empirical inputs. You may not require any.
 
Sam, if you read this I'm quoting you because you made me think.

Here's my take...

What's your point? BTC doesn't have the "legal tender advantage" because that's not an advantage. Fiat money is money that derives its value from government regulation and backing.

I'd agree that Fiat isn't a "good" thing.

But it's a massive advantage. No matter how worthless the USD is people believe in it because of the Government. People have confidence in it. They don't question its value. And there's nowhere on the planet right now where you're going to starve to death if you've got a few grand in fiat currency in your pocket.

BTC doesn't have that. That's why it's not fiat.

And that's one of many reasons that it'll never work as "real" currency. If you went out on the street right now, and asked 100 random people if they'd trade you $10 for 10 BTC's you'd be lucky to get a taker. Even though they're going for close to $30 each right now.

There's a lot of problems with that, and a lot of reasons why I don't expect it to change.

The problem right now is that it's not liquid. If you want to buy anything with it in day to day life, you have to exchange it back into USD.

That doesn't mean it doesn't work. You know what else isn't fiat? Gold. You aren't making a point.

Gold is historically valuable beyond its role as currency. It non-corrosive. It's easily molded/divided and impossible to counterfeit. It's a status symbol. It's rare enough to be scarce, but easy enough to produce for widespread use.

You can put gold into a safe and reasonably expect it to hold its value 10-years from now. Its value is long established. And people value it for reasons beyond just being a form of currency.

You're saying that BTC won't work because it won't work. You haven't asserted any valid reasons why it won't work. Do you know of a money experiment that has resembled btc in the past that failed? Do you know some economic principle that isn't Keynesian that indicates to you that deflationary experiments won't work? Do you think the volatility will kill BTC? What is it? Because there is a lot of momentum, and simply saying it won't work based on your internal thought experiment is neither helpful nor consistent. What will stop this momentum? Do you have some principle you can derive from early American culture that has to do with regional currencies not working? Do you have a problem with what Bitcoin is backed in? Do you think that the protocol is insecure? Do you know something about quantum computing that I don't that will destroy the protocol? You haven't cited anything. You've simply said it won't work, and that we have to wait a while to find out that you're right. Good for you! I'm excited to find out whether your prediction based on nothing is correct. And whether or not it is, is completely independent of the prediction itself. When or if it all comes tumbling down, you still will not have identified the mechanism that killed the experiment. Your just saying what popular opinion regarding Bitcoin is. Good for you! Very courageous. You and my father who doesn't know how to turn a computer on both agree. Now explain why.

I'm going to skip over a lot of that, especially the deflation part.

I personally equate BTC to something like chips at a casino. In that little bubble, you can buy food and drinks with them. You can barter with them. Whatever you want. But when you come back to reality you'll be trading them in for USD bills.

There's a lot of money to be made right now. But people, at least not outside of that small community, aren't looking at them as a long-term asset.

If the SHTF would you rather want BTC's or gold? It's an easy answer IMO, because the only value that BTC's have are what they're perceived to be worth in fiat money.

If the dollar collapsed do you think you'd be able to cash out your BTC's? Maybe. But I wouldn't bet on it.

The USD went away from the gold standard, but it's still backed by commodities. It's backed by natural resources, land, minerals, oil, private property and future generations of debt.

The value of BTC is backed by speculation. It's not inherently in demand. It's not scarce.

You have to define what failure looks like. If nothing else, the alternative currency experiment has been a great success.

In my personal opinion, failure would be not replacing the monetary system as we know it. Failure is virtually guaranteed.

I love the experiment. And as a commodity to be traded, in the short term I think it's been fun to watch. Maybe it'll still be around in 20 years, who knows?

I like BTC a lot.

I like the simplicity. I like the convenience. The volatility is exciting but it's unpredictable. I think it has the best of intentions. But ultimately it's a tool like a coupon at the grocery store or a chip at the casino.

It has artificial value that can be manipulated in the short-term for profit. In the long term you're going to have to convert it into something else to be an asset.

I believe that for many reasons, but the biggest one is this;

Central banks control the world. They control our governments. They levy our wars. They control our media. They own our property. They control our spending power. They own you.

When the economy is booming, they'll take their cut of everything you produce.

When it's bust, they'll inflate currency, raise interest rates, tax the shit out of you and seize your property.

If it comes down to killing you, or throwing you in jail, it's all good, they make money on that too.

But if BTC ever came close to being something that got in their way, they'd probably find a way to turn it into another tool to control people. If that failed, they'd crush it.

Probably under the guise of "cyber-security".

We can talk about sound money, booms, busts, inflation or supply and demand... But the reality is these people have killed millions to expand this power, a p2p virtual currency ain't going to be what brings them down.

Just my opinion.

"All the perplexities, confusions, and distresses in America arise, not from defects in the Constitution or confederation, not from want of honor or virtue, as much as from downright ignorance of the nature of coin, credit, and circulation."

- John Quincy Adams

"Every effort has been made by the Federal Reserve Board to conceal its powers, but the truth is that the Federal Reserve System has usurped the government. It controls everything in congress and it controls all our foreign relations. It makes and breaks governments at will."

- Louis McFadden, Chairman of the House Committee on Banking and Currency

"History records that the money changers have used every form of abuse, intrigue, deceit, and violent means possible to maintain their control over governments by controlling money and its issuance."

- James Madison

"I have never seen more Senators express discontent with their jobs. I think the major cause is that, deep down in our hearts, we have been accomplices in doing something terrible and unforgivable to our wonderful country. Deep down in our heart, we know that we have given our children a legacy of bankruptcy. We have defrauded our country to get ourselves elected."

- John Danforth

"I have unwittingly ruined my country. A great industrial nation is controlled by it's system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world… no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men."

- Woodrow Wilson

"The one aim of these financiers is world control by the creation of inextinguishable debts."

- Henry Ford


"Should government refrain from regulation and taxation, the worthlessness of the money becomes apparent and the fraud can no longer be concealed."

- Lord John Maynard Keynes, "The Economic Consequences of Peace"

"The Federal Reserve banks are one of the most corrupt institutions the world has ever seen. There is not a man within the sound of my voice who does not know that this nation is run by the International bankers."

- Congressman Louis T. McFadden (Rep. Pa)


"The Great Depression was not accidental, it was a carefully contrived occurrence. The international Bankers sought to bring about a condition of despair here so that they might emerge as rulers of us all."

- Louis McFadden


Let's end it on a positive one...

"The youth who can solve the money question will do more for the world than all the professional soldiers of history."

- Henry Ford Sr.
 

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Sam, if you read this I'm quoting you because you made me think.

Here's my take...



I'd agree that Fiat isn't a "good" thing.

But it's a massive advantage. No matter how worthless the USD is people believe in it because of the Government. People have confidence in it. They don't question its value. And there's nowhere on the planet right now where you're going to starve to death if you've got a few grand in fiat currency in your pocket.



And that's one of many reasons that it'll never work as "real" currency. If you went out on the street right now, and asked 100 random people if they'd trade you $10 for 10 BTC's you'd be lucky to get a taker. Even though they're going for close to $30 each right now.

There's a lot of problems with that, and a lot of reasons why I don't expect it to change.

The problem right now is that it's not liquid. If you want to buy anything with it in day to day life, you have to exchange it back into USD.



Gold is historically valuable beyond its role as currency. It non-corrosive. It's easily molded/divided and impossible to counterfeit. It's a status symbol. It's rare enough to be scarce, but easy enough to produce for widespread use.

You can put gold into a safe and reasonably expect it to hold its value 10-years from now. Its value is long established. And people value it for reasons beyond just being a form of currency.



I'm going to skip over a lot of that, especially the deflation part.

I personally equate BTC to something like chips at a casino. In that little bubble, you can buy food and drinks with them. You can barter with them. Whatever you want. But when you come back to reality you'll be trading them in for USD bills.

There's a lot of money to be made right now. But people, at least not outside of that small community, aren't looking at them as a long-term asset.

If the SHTF would you rather want BTC's or gold? It's an easy answer IMO, because the only value that BTC's have are what they're perceived to be worth in fiat money.

If the dollar collapsed do you think you'd be able to cash out your BTC's? Maybe. But I wouldn't bet on it.

The USD went away from the gold standard, but it's still backed by commodities. It's backed by natural resources, land, minerals, oil, private property and future generations of debt.

The value of BTC is backed by speculation. It's not inherently in demand. It's not scarce.



In my personal opinion, failure would be not replacing the monetary system as we know it. Failure is virtually guaranteed.

I love the experiment. And as a commodity to be traded, in the short term I think it's been fun to watch. Maybe it'll still be around in 20 years, who knows?

I like BTC a lot.

I like the simplicity. I like the convenience. The volatility is exciting but it's unpredictable. I think it has the best of intentions. But ultimately it's a tool like a coupon at the grocery store or a chip at the casino.

It has artificial value that can be manipulated in the short-term for profit. In the long term you're going to have to convert it into something else to be an asset.

I believe that for many reasons, but the biggest one is this;

Central banks control the world. They control our governments. They levy our wars. They control our media. They own our property. They control our spending power. They own you.

When the economy is booming, they'll take their cut of everything you produce.

When it's bust, they'll inflate currency, raise interest rates, tax the shit out of you and seize your property.

If it comes down to killing you, or throwing you in jail, it's all good, they make money on that too.

But if BTC ever came close to being something that got in their way, they'd probably find a way to turn it into another tool to control people. If that failed, they'd crush it.

Probably under the guise of "cyber-security".

We can talk about sound money, booms, busts, inflation or supply and demand... But the reality is these people have killed millions to expand this power, a p2p virtual currency ain't going to be what brings them down.

Just my opinion.

Copywriter spotted.
 
It seems pretty obvious that whatever you choose for your currency would have to be some type of relatively scarce natural resource.

Since the only consideration you take into account is inflation/deflation of the value of the currency, you would want your currency to be something whose quantity/value is difficult to increase or decrease.

The only thing people really care about when it comes to their money is if their money will hold its value over time or even increase slightly. Paper money can be printed and diluted. Digital money can be easily diluted. There's nothing that is really perfectly undilutable, but precious metals probably comes the closest.

How anyone can think a digital currency would work is beyond me. Its value can be changed so easily.

I think the idea of several competing precious metals as currencies is probably the only workable idea. Anything else is too easy to mess with/alter. You have to start with the basic assumption that anyone in control of the value of that currency would exploit that power and make it almost literally impossible for them to change it, even if they wanted to.
 
I think the idea of several competing precious metals as currencies is probably the only workable idea. Anything else is too easy to mess with/alter.

Quite a while ago, China floated the idea to develop a new global currency that was linked to the GDP of several different countries. I'm no economist, but that might be a feasible and solid long-term solution. Then again, I guess that's the same principle as the Euro, and we can all see how well that's been working out.
 
All I know is that Bitcoin is at $30 tonight... A full 10x my initial investment.

Oh yeah, I know this too: There is nothing as scarce as Bitcoin. It simply can't be counterfeited or diluted without adding more nodes to the network than already exist.
 
Bitcoin is another fiat currency, but it will never be ubiquitous because it has no legal tender advantage, it's upper bound for production won't allow it to become the choice of the market, and there is no secondary demand. As soon as someone comes up with a better or more novel crypto-currency, Bitcoins will rapidly become worthless.

Conjecture

Whether you like gold or not, and I am not a gold bug, it does have a several thousand year run as money, all over the world. That counts for something in my book. I suspect we won't be talking much about Bitcoin in 10 years.

Hurr durr nothing ever changes. More conjecture.

Not at all. It won't work because it's incredibly unlikely to become ubiquitous. And if it became ubiquitous, it would become illegal to use as money just like gold. In which case, it would stop being ubiquitous.

Conjecture.

Bitcoin has a bunch of flaws, not least of which is the fact that by design, it can never be ubiquitous the way gold was 300 years ago, or US dollars are today.

Conjecture.

Bitcoin also has no secondary purpose. When Federal reserve notes were introduced as currency, they were debt instruments redeemable in gold.

It's secondary purpose is the reason for it's growing popularity. Anonymity and freedom from teh guments. There is a demand for both of these.

Bitcoin's irrelevant to 99.9% of the world. It's hardcore fanboys who like to start up arguments (go to any econ forum and look for the BTC threads) ostensibly to serve the dual purposes of proselytizing and validating.

Funny thing about change is it has to start somewhere................

Hopefully my current balance of like 0.005 BTC won't bias my opinion too much...

I see that BTC is growing in popularity in a certain social demographic. Nerds, to be precise. I think if you went to any bar in the country and started asking women what they thought of Bitcoin, you'd probably have to get into triple digits before you found one that had even heard of it.

My point is, for something like this to ever become popular (in the real sense of the word, not the front page of tech crunch kind of way), it would require a significant amount of time to change the way the masses think about money. Until then it's just some super nerdy, internet-based alternative currency that like so many other things, nerds think is revolutionary when in reality the rest of the world just doesn't care.

Funny thing about change is it has to start somewhere................

I don't know much about bitcoins and how it all works, but when you start seeing news stories and politicians talking about it and how it always seems to be associated with "negative/problematic" issues...is there really "no way" for the marketplace to be "dealt with"? So many younger kids know about silk road at this point, there's gotta be negative events on the horizen for bitcoins IMO.

Conjecture.

a p2p virtual currency ain't going to be what brings them down.

Just my opinion.

Conjecture.


Let me sum up the arguments against bit coin made in this thread.

"Them guvments too strong, theys never gonna let bitcoin succeed."

I don't really have an interest to back bitcoins probability of succeeding, I just find the arguments made against bitcoin in this thread to be pretty weak. Maybe bitcoin will catch on, maybe it won't. Maybe bitcoin will become the markets choice and when (if) the gov tries to make it illegal this will be the catalyst for people to overthrow government. Maybe that's pie in the sky tin foil hat talk. Maybe bitcoin will simply crash and burn in a few years. Who knows.

What we do know is there is a demand for anonymity and money outside of central banks. Is the demand strong enough? Can the central banks be beat? Will bitcoin be the answer? Will the market accept a digital currency like bitcoin? Time will tell. But don't sit here and act like this is a factual argument where one side is 100% right and the other is wrong. This conversation is simply conjecture. No one knows how this will play out.