On 12/23/2013 8:57 PM, Jason Resch wrote:
On Mon, Dec 23, 2013 at 10:22 PM, meekerdb <meeke...@verizon.net
On 12/23/2013 6:54 PM, Jason Resch wrote:
On Mon, Dec 23, 2013 at 5:02 PM, meekerdb <meeke...@verizon.net
On 12/23/2013 12:46 PM, Jason Resch wrote:
On Mon, Dec 23, 2013 at 2:12 PM, meekerdb <meeke...@verizon.net
On 12/23/2013 9:07 AM, Bruno Marchal wrote:
Crypto-currencies, like cryptography, can surely help to save the
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
their work "honestly" or not.
"honestly" is not moral here, but it means that it is attempted, at
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
When money is used honestly, every one (good willing enough) win
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,
at that moment become pyramidal.
It is basically a confusion between meaning and use, or goal and
Today, a part of the economy relies on lies, so it is more the
bank system which seems to lead us (partially) to a pyramid.
The existence of crypto-money can help by providing different
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
reserves of gold or silver and they issued their own script money
redeemable in gold or silver. BUT they always loaned much more
than they had gold or silver. They relied, quite reasonably, on the
that in any given time interval, only few people would want to
their script in gold or silver.
Now you may say this is "lying", but so long as not done to excess,
makes for good economics. Consider and extreme example: Suppose the
'banker' has no gold or silver at all but he's prepared to loan
anyway. Someone comes to him and wants to borrow $1000 to build a
over small river near the town. The banker loans him the script.
for material and labor, which he can do because people believe the
is backed by gold. The bridge gets built and so farmers can come
much more quickly, productivity is improved and the town thrives,
people deposit money in the bank and the banker can actually buy
to back up his script. "Artificially" increasing the money supply
very useful; but just as with all kinds of interactions it depends
on trust. If nobody trusts anybody else, as now so many people
automatically distrust their government, then the economy is
One difference I see is that with crypto-currencies intermediaries are
required for either, 1. safe keeping, or 2. transfers. If they are
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
Commercial banks from which people get loans don't create the Federal
they loan out, they need to already have some on hand before they can make
With bitcoins it is clear you can't loan any out unless they are in your
That's like saying those banks in the old west couldn't loan out gold
had it in their possession. Sure; but it didn't keep them from loaning
according to them, was backed by gold.
This would be considered fraud in any other line of business.
Are you a utilitarian or a moralist? Their script was backed by gold - just not enough to
cover *all* the script.
Of course, our money today is fundamentally nothing but IOUs, which can be
out of thin air and backed by nothing but a promise. The instability of
system arises when debt (which is money in our system) is created faster
rate at which the economy grows. Defaulted debt destroys outstanding IOUs
collapses the money supply.
Which is the down side when money creation is excessive - but you miss the
my example which shows that this same fiat creation of money can also be
Fundamentally all money rests on trust. Even gold is only good because
believe others will accept it for food, sex, etc.
Trust is not a bad thing to have, but to design a system that inherently requires trust
to function and will crash should that trust ever evaporate is a less-than-perfect design.
That's why the Federal Reserve was created and member banks get deposit insurance and have
to abide by regulations on what fractional reserves they have. Investment banks could
still operate like in the old west - at least until Glass-Steagall was repealed.
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