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It seems pretty obvious to me as well. Given huge speculation surrounding them at the moment I'm surprised we don't hear more people warning about these things.

by simias 9y ago

It seems pretty obvious to me as well. Given huge speculation surrounding them at the moment I'm surprised we don't hear more people warning about these things. I don't think I want to live in a world where BTC replaces the USD/EUR/... Untraceable money means that corruption and tax evasion would be easier than ever. Democratic governments would be worse off in dealing with that, because unlike totaliatrian regimes they won't be able to round up BTC-rich people and break their fingers until they give their secret keys. Deflation means that the rich will get richer doing nothing while the poor won't be able to get a loan to bootstrap their businesses. Forget about trickle down economics, this is downright "trickle up". I have yet to hear a reasonable rebuttal to these claims. Every time I see these points brought up in the bitcoin community it's met with a bunch of hand waiving and claims that they're "FUD" and that the poster doesn't know what they're talking about. So please, BTC enthusiasts, educate me so that I can stop spreading this "FUD", where's the flaw in my reasoning?

knocte 9y ago
> Untraceable money Bitcoin is not untraceable money, it can be even more traceable than normal currency. It could be stablished as a law that public money when being spent in the blockchain needs to be auditable by the people (identities of sender and recipient known), and this way you would end up with even less corruption than the current system. > Deflation means that the rich will get richer Wrong. Rich people don't have money, they have holdings. Most of the holdings that rich people nowadays have are not money. Deflation just benefits the savers, as opposed to the spenders. Some savers might be rich but not all. Incentivising saving instead of consumption may make the planet a bit greener. Plus, if one day we stop measuring cryptocurrency value with a fiat-unit of measure, maybe we find out that the cryptocurrency value is actually the stable value. The asset that is not stable is the fiat currency because it's being depreciated all the time. The day all stores in the planet denominate prices in cryptocurrency, the bad consequences of deflation (hoarding for the sake of profit) will be almost imperceptible.
- simias 9y ago
  >> Deflation means that the rich will get richer >Wrong. Rich people don't have money, they have holdings. Most of the holdings that rich people nowadays have are not money. Isn't one reason for not hoarding cash (and instead investing it in various holdings, stock market, etc...) is that money loses value? If I was a millionaire in dollars I definitely wouldn't keep that on my bank account, slowly having it lose its value. If I was a millionaire in BTC I'd have a hardware wallet with my secret keys in a safe and that's about it. >Deflation just benefits the savers, as opposed to the spenders. Some savers might be rich but not all. Sure, but conversely I can tell you that the people who don't save money are overwhelmingly poor. For a big chunk of humanity saving money is a luxury. >Incentivising saving instead of consumption may make the planet a bit greener. Coin mining will take care of filling that gap, don't worry. If rich people reduce their investments because of deflation how do you redistribute wealth? >Plus, if one day we stop measuring cryptocurrency value with a fiat-unit of measure, maybe we find out that the cryptocurrency value is actually the stable value. Well yeah, 1BTC == 1BTC, that's stable I guess. If BTC replaces fiat it'll stabilize eventually but it will still be deflationary. My arguments were about that, not the current instability. >The asset that is not stable is the fiat currency because it's being depreciated all the time. The day all stores in the planet denominate prices in cryptocurrency, the bad consequences of deflation (hoarding for the sake of profit) will be almost imperceptible. That's kind of the hand waving I was talking about in my previous comment. I don't see how you can justify you jumping to that conclusion. How can you assume that switching from an inflationary to a deflationary economy "will be almost imperceptible"?
  - knocte 9y ago
    > If I was a millionaire in BTC I'd have a hardware wallet with my secret keys in a safe and that's about it. Lending or investing your BTC would always make you net more than just hoarding it (at least when all prices are denominated in BTC already). > Sure, but conversely I can tell you that the people who don't save money are overwhelmingly poor. For a big chunk of humanity saving money is a luxury. True, I didn't say that low-class can save. But most savers are middle class IMO. > Coin mining will take care of filling that gap, don't worry. Wrong, 2 links: https://www.bloomberg.com/view/articles/2017-12-07/bitcoin-is-greener-than-its-critics-think https://www.bloomberg.com/view/articles/2017-12-07/bitcoin-i... https://blog.bitcoin.org.hk/bitcoin-mining-and-energy-consumption-4526d4b56186 https://blog.bitcoin.org.hk/bitcoin-mining-and-energy-consum... > How can you assume that switching from an inflationary to a deflationary economy "will be almost imperceptible"? Because when all prices get denominated in BTC, you won't see your holdings appreciate. The only effect you will see, caused by deflation, is that prices of things diminish over time. Which is kind of what happens nowadays with hardware (because it's the goods where the effects of technology improvements are noticed in the most sensible way), however I don't know anyone that hoards their holdings to be able to buy a better and cheaper computer tomorrow.
- MintPattern 9y ago
  > The asset that is not stable is the fiat currency because it's being depreciated all the time. Checking accounts (M1) have grown by (only) 8%/year over the past 2 years. Savings accounts (M2) have grown by (only) 6%/year over the past 2 years. Physical cash in circulation has grown by (only) 5%/year over the past 2 years. Even if we value bitcoin today only by it's future 0% emission rate starting at around the year 2036, bitcoin shouldn't have been rising more than 7 or 8% per year relative to the US Dollar. Anymore is unlikely to be sustainable. Am I missing anything? Citation: https://www.federalreserve.gov/releases/h6/current/default.htm https://www.federalreserve.gov/releases/h6/current/default.h...
theorique 9y ago
BTC is not "untraceable money". Everybody has (or can have) a copy of the blockchain, which is the cryptographically signed and verified ledger. If anything, it is more traceable and public than physical cash. The difference is that you don't know who 63dca1f6eddfb659d71ec5244ab950a4 or e3557c1e589e2a687f6afe1a253196ca are. But when you do associate a person with a given key, that association probably persists over time.
- simias 9y ago
  I replied to to this point in the parent comment but to expand on that: >If anything, it is more traceable and public than physical cash. That's true, but cash has its own set of limitations. Using cash to transfer large sums of money in not very convenient and good luck explaining to the border police why you have $20 million in cash with you. Spending and laundering large amounts of cash without raising suspicions is also pretty difficult. >But when you do associate a person with a given key, s/when/if/ >that association probably persists over time. How so when you can generate a virtually infinite number of new addresses whenever you like and the current practice is to avoid reusing the same address if at all possible? Sure if I buy some drugs in BTC and then I see that some money transits directly from the destination address to the known address of some politician then I know that something fishy is going on. But if the money is then split and merged to a bunch of different addresses, then moved to an exchange in china where it's converted to LiteCoins, then put through a coin mixer, then moved to an exchange in Brazil where it's converted back to Bitcoins then I wish good luck to the IRS employees. And you can do all of that from the comfort of your home in an afternoon, through TOR, without having to reveal your identity to any 3rd party.
lawn 9y ago
I don't completely disagree but I will try to at least bring up some contrary views. > Untraceable money Bitcoin is pseudoanonymous with it's public ledger, hardly untraceable. Look into Monero for a proper anonymous coin. > Untraceable money means that corruption and tax evasion would be easier than ever. A contrary point is that today corruption and tax evasion is only for the very rich, see the paradise papers for example. In a sick way this could give the common man more power and maybe make the world a little more balanced. Also tax collection is already heavily based on social pressure and doing the right thing. It's not obvious that the threat of getting caught, compared to the social stigma, weighs more. > Deflation means that the rich will get richer doing nothing while the poor won't be able to get a loan to bootstrap their businesses. Forget about trickle down economics, this is downright "trickle up". I also don't like extreme deflation, but I also don't like the inflation based system we have today. Inflation basically eats away at your savings. This is a bigger problem for everyday poor people compared to the rich as they have more investment options. Their buffer they hold in banks or in cash is smaller percentage wise, they can more easily invest in housing and they can more easily grow their capital as money breads money. The problem with rich getting richer is already present. Without inflation loans would harder and would combat the very real problems with too much loans (housing bubble, student loan crisis, ...). It could also help to reign in fractional banking as it would get riskier/harder.
- simias 9y ago
  >Bitcoin is not untraceable money, it can be even more traceable than normal currency. Fair enough, how about "trivial to launder" instead? The fact that every transaction is visible on the blockchain means that people who don't bother obfuscating their tracks (i.e. honest people who don't feel they have anything to hide) are the one who risk their privacy invaded: "hey, look, this is the address where we pay X his salary and some of it got transfered to the known address of this sex shop website". If you want to hide your tracks however it's easy. Say I'm a politician and I want to accept a bribe. I can get a briefcase full of cash, but that's bulky, not very convenient and I could get caught if I try to move it (especially across borders). Or I could try to open a bank account in some place where people look the other way but it's more complicated, involves third parties who could expose me (panama papers, lux leaks...), leaves a paper trail etc... With BTC I click "generate a new receive address" in my wallet, give it to my anonymous benefactor and that's that. Then after that if I really want to make it difficult to follow the money I can split my coin in multiple addresses, do a bunch of dummy transactions to obfuscate where the BTC change hands, go through a bunch of coin mixers, maybe convert to an other crypto (monero for instance?), do a bunch more mixing, and then back to BTC. Good luck unravelling all that. >It could be stablished as a law that public money when being spent in the blockchain needs to be auditable by the people (identities of sender and recipient known), and this way you would end up with even less corruption than the current system. Public spending is already supposed to be auditable in the democratic countries I know of (except in very specific cases, like "black boxes" for paying informants etc..). Generally corruption and waste is when people overpay for a service, like say paying 10x the cost for the construction of a new stadium, favouring a contractor over an other etc... I don't think BTC would help greatly with that. There are many, many ways of making "technically legal" purchases that conceal corruption, I don't think it would improve things very much. "Here, have this very valuable painting by Manet as a thank you for your help", "Here, let me make a charitable donation to your foundation", "Here, let me change this piece of regulation that will benefit your company", etc... Unless you want to force all citizens (in the public and private) to publish their addresses I'm not sure you can really reign that in. And even then, how would you enforce that?
russdpale 9y ago
Bitcoin is not untraceable. It is confidential but it is not anonymous, they are different things.

by simias 9y ago

knocte 9y ago

> Untraceable money Bitcoin is not untraceable money, it can be even more traceable than normal currency. It could be stablished as a law that public money when being spent in the blockchain needs to be auditable by the people (identities of sender and recipient known), and this way you would end up with even less corruption than the current system. > Deflation means that the rich will get richer Wrong. Rich people don't have money, they have holdings. Most of the holdings that rich people nowadays have are not money. Deflation just benefits the savers, as opposed to the spenders. Some savers might be rich but not all. Incentivising saving instead of consumption may make the planet a bit greener. Plus, if one day we stop measuring cryptocurrency value with a fiat-unit of measure, maybe we find out that the cryptocurrency value is actually the stable value. The asset that is not stable is the fiat currency because it's being depreciated all the time. The day all stores in the planet denominate prices in cryptocurrency, the bad consequences of deflation (hoarding for the sake of profit) will be almost imperceptible.

simias 9y ago
>> Deflation means that the rich will get richer >Wrong. Rich people don't have money, they have holdings. Most of the holdings that rich people nowadays have are not money. Isn't one reason for not hoarding cash (and instead investing it in various holdings, stock market, etc...) is that money loses value? If I was a millionaire in dollars I definitely wouldn't keep that on my bank account, slowly having it lose its value. If I was a millionaire in BTC I'd have a hardware wallet with my secret keys in a safe and that's about it. >Deflation just benefits the savers, as opposed to the spenders. Some savers might be rich but not all. Sure, but conversely I can tell you that the people who don't save money are overwhelmingly poor. For a big chunk of humanity saving money is a luxury. >Incentivising saving instead of consumption may make the planet a bit greener. Coin mining will take care of filling that gap, don't worry. If rich people reduce their investments because of deflation how do you redistribute wealth? >Plus, if one day we stop measuring cryptocurrency value with a fiat-unit of measure, maybe we find out that the cryptocurrency value is actually the stable value. Well yeah, 1BTC == 1BTC, that's stable I guess. If BTC replaces fiat it'll stabilize eventually but it will still be deflationary. My arguments were about that, not the current instability. >The asset that is not stable is the fiat currency because it's being depreciated all the time. The day all stores in the planet denominate prices in cryptocurrency, the bad consequences of deflation (hoarding for the sake of profit) will be almost imperceptible. That's kind of the hand waving I was talking about in my previous comment. I don't see how you can justify you jumping to that conclusion. How can you assume that switching from an inflationary to a deflationary economy "will be almost imperceptible"?
- knocte 9y ago
  > If I was a millionaire in BTC I'd have a hardware wallet with my secret keys in a safe and that's about it. Lending or investing your BTC would always make you net more than just hoarding it (at least when all prices are denominated in BTC already). > Sure, but conversely I can tell you that the people who don't save money are overwhelmingly poor. For a big chunk of humanity saving money is a luxury. True, I didn't say that low-class can save. But most savers are middle class IMO. > Coin mining will take care of filling that gap, don't worry. Wrong, 2 links: https://www.bloomberg.com/view/articles/2017-12-07/bitcoin-is-greener-than-its-critics-think https://www.bloomberg.com/view/articles/2017-12-07/bitcoin-i... https://blog.bitcoin.org.hk/bitcoin-mining-and-energy-consumption-4526d4b56186 https://blog.bitcoin.org.hk/bitcoin-mining-and-energy-consum... > How can you assume that switching from an inflationary to a deflationary economy "will be almost imperceptible"? Because when all prices get denominated in BTC, you won't see your holdings appreciate. The only effect you will see, caused by deflation, is that prices of things diminish over time. Which is kind of what happens nowadays with hardware (because it's the goods where the effects of technology improvements are noticed in the most sensible way), however I don't know anyone that hoards their holdings to be able to buy a better and cheaper computer tomorrow.
MintPattern 9y ago
> The asset that is not stable is the fiat currency because it's being depreciated all the time. Checking accounts (M1) have grown by (only) 8%/year over the past 2 years. Savings accounts (M2) have grown by (only) 6%/year over the past 2 years. Physical cash in circulation has grown by (only) 5%/year over the past 2 years. Even if we value bitcoin today only by it's future 0% emission rate starting at around the year 2036, bitcoin shouldn't have been rising more than 7 or 8% per year relative to the US Dollar. Anymore is unlikely to be sustainable. Am I missing anything? Citation: https://www.federalreserve.gov/releases/h6/current/default.htm https://www.federalreserve.gov/releases/h6/current/default.h...

theorique 9y ago

BTC is not "untraceable money". Everybody has (or can have) a copy of the blockchain, which is the cryptographically signed and verified ledger. If anything, it is more traceable and public than physical cash. The difference is that you don't know who 63dca1f6eddfb659d71ec5244ab950a4 or e3557c1e589e2a687f6afe1a253196ca are. But when you do associate a person with a given key, that association probably persists over time.

simias 9y ago
I replied to to this point in the parent comment but to expand on that: >If anything, it is more traceable and public than physical cash. That's true, but cash has its own set of limitations. Using cash to transfer large sums of money in not very convenient and good luck explaining to the border police why you have $20 million in cash with you. Spending and laundering large amounts of cash without raising suspicions is also pretty difficult. >But when you do associate a person with a given key, s/when/if/ >that association probably persists over time. How so when you can generate a virtually infinite number of new addresses whenever you like and the current practice is to avoid reusing the same address if at all possible? Sure if I buy some drugs in BTC and then I see that some money transits directly from the destination address to the known address of some politician then I know that something fishy is going on. But if the money is then split and merged to a bunch of different addresses, then moved to an exchange in china where it's converted to LiteCoins, then put through a coin mixer, then moved to an exchange in Brazil where it's converted back to Bitcoins then I wish good luck to the IRS employees. And you can do all of that from the comfort of your home in an afternoon, through TOR, without having to reveal your identity to any 3rd party.

lawn 9y ago

I don't completely disagree but I will try to at least bring up some contrary views. > Untraceable money Bitcoin is pseudoanonymous with it's public ledger, hardly untraceable. Look into Monero for a proper anonymous coin. > Untraceable money means that corruption and tax evasion would be easier than ever. A contrary point is that today corruption and tax evasion is only for the very rich, see the paradise papers for example. In a sick way this could give the common man more power and maybe make the world a little more balanced. Also tax collection is already heavily based on social pressure and doing the right thing. It's not obvious that the threat of getting caught, compared to the social stigma, weighs more. > Deflation means that the rich will get richer doing nothing while the poor won't be able to get a loan to bootstrap their businesses. Forget about trickle down economics, this is downright "trickle up". I also don't like extreme deflation, but I also don't like the inflation based system we have today. Inflation basically eats away at your savings. This is a bigger problem for everyday poor people compared to the rich as they have more investment options. Their buffer they hold in banks or in cash is smaller percentage wise, they can more easily invest in housing and they can more easily grow their capital as money breads money. The problem with rich getting richer is already present. Without inflation loans would harder and would combat the very real problems with too much loans (housing bubble, student loan crisis, ...). It could also help to reign in fractional banking as it would get riskier/harder.

simias 9y ago
>Bitcoin is not untraceable money, it can be even more traceable than normal currency. Fair enough, how about "trivial to launder" instead? The fact that every transaction is visible on the blockchain means that people who don't bother obfuscating their tracks (i.e. honest people who don't feel they have anything to hide) are the one who risk their privacy invaded: "hey, look, this is the address where we pay X his salary and some of it got transfered to the known address of this sex shop website". If you want to hide your tracks however it's easy. Say I'm a politician and I want to accept a bribe. I can get a briefcase full of cash, but that's bulky, not very convenient and I could get caught if I try to move it (especially across borders). Or I could try to open a bank account in some place where people look the other way but it's more complicated, involves third parties who could expose me (panama papers, lux leaks...), leaves a paper trail etc... With BTC I click "generate a new receive address" in my wallet, give it to my anonymous benefactor and that's that. Then after that if I really want to make it difficult to follow the money I can split my coin in multiple addresses, do a bunch of dummy transactions to obfuscate where the BTC change hands, go through a bunch of coin mixers, maybe convert to an other crypto (monero for instance?), do a bunch more mixing, and then back to BTC. Good luck unravelling all that. >It could be stablished as a law that public money when being spent in the blockchain needs to be auditable by the people (identities of sender and recipient known), and this way you would end up with even less corruption than the current system. Public spending is already supposed to be auditable in the democratic countries I know of (except in very specific cases, like "black boxes" for paying informants etc..). Generally corruption and waste is when people overpay for a service, like say paying 10x the cost for the construction of a new stadium, favouring a contractor over an other etc... I don't think BTC would help greatly with that. There are many, many ways of making "technically legal" purchases that conceal corruption, I don't think it would improve things very much. "Here, have this very valuable painting by Manet as a thank you for your help", "Here, let me make a charitable donation to your foundation", "Here, let me change this piece of regulation that will benefit your company", etc... Unless you want to force all citizens (in the public and private) to publish their addresses I'm not sure you can really reign that in. And even then, how would you enforce that?

russdpale 9y ago

Bitcoin is not untraceable. It is confidential but it is not anonymous, they are different things.