On Mon, Dec 23, 2013 at 5:02 PM, meekerdb <meeke...@verizon.net> wrote:

>  On 12/23/2013 12:46 PM, Jason Resch wrote:
> On Mon, Dec 23, 2013 at 2:12 PM, meekerdb <meeke...@verizon.net> wrote:
>>  On 12/23/2013 9:07 AM, Bruno Marchal wrote:
>> Crypto-currencies, like cryptography, can surely help to save the freedom
>> of privacy and privateness.
>> Crypto-currencies does not need to be a pyramidal con, like Quentin
>> suspects. They just allowed to create new independent banks which can do
>> their work "honestly" or not.
>> "honestly" is not moral here, but it means that it is attempted, at the
>> least, to not base economy on lies (which often happens to keep jobs
>> despite they became obsolete).
>> Money is both the most wonderful economical tool and the most horrible
>> life goal.
>> When money is used honestly, every one (good willing enough) win and is
>> enriched. But the longer the play, the bigger the liars can win, so "those
>> who make money the main goal" crack, and corrupt the system, which at that
>> moment become pyramidal.
>> It is basically a confusion between meaning and use, or goal and tool.
>> Today, a part of the economy relies on lies, so it is more the actual
>> bank system which seems to lead us (partially) to a pyramid.
>> The existence of crypto-money can help by providing different competing
>> economies, and can help in making transition (and awakening from the lies)
>> more smooth.
>>  I don't see it as any different than gold or silver.  Banks used to have
>> reserves of gold or silver and they issued their own script money that was
>> redeemable in gold or silver.  BUT they always loaned much more script than
>> they had gold or silver.  They relied, quite reasonably, on the fact that
>> in any given time interval, only few people would want to redeem their
>> script in gold or silver.
>> Now you may say this is "lying", but so long as not done to excess, it
>> makes for good economics.  Consider and extreme example: Suppose the
>> 'banker' has no gold or silver at all but he's prepared to loan script
>> anyway.  Someone comes to him and wants to borrow $1000 to build a bridge
>> over small river near the town.  The banker loans him the script.  He pays
>> for material and labor, which he can do because people believe the script
>> is backed by gold.  The bridge gets built and so farmers can come to town
>> much more quickly, productivity is improved and the town thrives, so more
>> people deposit money in the bank and the banker can actually buy some gold
>> to back up his script.  "Artificially" increasing the money supply can be
>> very useful; but just as with all kinds of interactions it depends a lot on
>> trust.  If nobody trusts anybody else, as now so many people automatically
>> distrust their government, then the economy is dragged down.
>> http://opinionator.blogs.nytimes.com/2013/12/21/in-no-one-we-trust/?_r=0
>> Brent
>  One difference I see is that with crypto-currencies intermediaries are
> not required for either, 1. safe keeping, or 2. transfers.  If they are
> never held by intermediaries then they have nothing to loan out.
> The point of my example is that you don't HAVE to have anything to loan
> out.

Commercial banks from which people get loans don't create the Federal
Reserve notes they loan out, they need to already have some on hand before
they can make a loan.  With bitcoins it is clear you can't loan any out
unless they are in your possession.

Of course, our money today is fundamentally nothing but IOUs, which can be
created out of thin air and backed by nothing but a promise. The
instability of such a system arises when debt (which is money in our
system) is created faster than the rate at which the economy grows.
Defaulted debt destroys outstanding IOUs and collapses the money supply.

>   Banks loaned out the value of gold without having the gold (having only
> a small part of it).
> As for security I'm not sure; can't you lose your bitcoins?
You can, but their security need not depend on traditional physical
security approaches: vaults, guards, cameras, etc. You can encrypt your
wallet and then its security is assured.  Your wallet may even be based on
some suitably long password or passphrase which is not stored physically
anywhere (as http://brainwallet.org/ demonstrates).

So long as you don't forget and don't disclose this secret your funds are


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