On 12/23/2013 6:54 PM, Jason Resch wrote:

On Mon, Dec 23, 2013 at 5:02 PM, meekerdb <meeke...@verizon.net <mailto: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
    <mailto: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 
        They just allowed to create new independent banks which can do their 
        "honestly" or not.
        "honestly" is not moral here, but it means that it is attempted, at the 
        to not base economy on lies (which often happens to keep jobs despite 
        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 
        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 
        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 
        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 
        redeemable in gold or silver.  BUT they always loaned much more script 
        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 
        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 
        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.



    One difference I see is that with crypto-currencies intermediaries are not 
    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.

That's like saying those banks in the old west couldn't loan out gold unless they had it in their possession. Sure; but it didn't keep them from loaning script that, according to them, was backed by gold.

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.

Which is the down side when money creation is excessive - but you miss the point of my example which shows that this same fiat creation of money can also be good. Fundamentally all money rests on trust. Even gold is only good because people believe others will accept it for food, sex, etc.

      Banks loaned out the value of gold without having the gold (having only a 
    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 safe.

Doesn't this password have to be transmitted over the internet (via the NSA?).


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