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Anyone who has a miner can generate bitcoin. Only the FED can create new USD.
by VMG 9y ago
Anyone who has a miner can generate bitcoin. Only the FED can create new USD.
- frgtpsswrdlame 9y agoSure, but what's the importance of that fact?
- solotronics 9y agothat it's the first distributed open currency much like BitTorrent is a distributed open fileshare.
- frgtpsswrdlame 9y agoAre we still on the libertarian thing? I guess I don't understand why the fact that BTC creation is distributed is important.
- VMG 9y agoI think the former method of creating currency is fairer and more transparent.
- Nuzzerino 9y agoIs this how 250 kWh of energy usage per BTC transaction is supposed to be considered ethical?
- VMG 9y agoIt is more ethical than financing wars through deficit spending. A on-chain bitcoin transaction allows an arbitrary number of off-chain transactions.
- rspeer 9y agoHow many times are people going to try whataboutism on HN? Everyone can recognize it by now. The existence of war does not absolve you. If your standard of morality is "everything that's better than war is okay", you have approximately no morality.
- VMG 9y agoThe whataboutism started with uninformed statements about bitcoin energy usage. My rebuttal is about the costs of the alternatives.
- frgtpsswrdlame 9y agoWell it's obviously not necessarily more transparent. I know that the Fed is creating money, I can find out how much it's creating and I can listen to government officials explain why we should create more/less money or why we should make money in this instance but not that one, etc. I can even vote for people whose dollar creation opinions line up with mine. In BTC I don't know who's creating it, what they believe about it and I have no way to affect their creation of it. Seems like the democratic governing system is more fair and transparent so where did I go wrong?
- VMG 9y agoIf you disagree with money printing, your vote will not matter. In bitcoin, the inflation schedule can be checked very easily. It doesn't matter who is creating it as long as the supply is stable and predictable.
- frgtpsswrdlame 9y ago>If you disagree with money printing, your vote will not matter. It would matter more than my (non-existent) vote in bitcoin would. >It doesn't matter who is creating it as long as the supply is stable and predictable. So to be clear, your problem isn't that the fed is centralized and btc is decentralized it's that btc is regular and the fed can be irregular?
- VMG 9y ago> It would matter more than my (non-existent) vote in bitcoin would. You don't have to use it though. > So to be clear, your problem isn't that the fed is centralized and btc is decentralized it's that btc is regular and the fed can be irregular? Both aspects are problematic. It's not only the FED that is centralized, the banking system itself is. Bitcoin is Peer-to-peer without trusted third parties.
- amarkov 9y agoIn Bitcoin, the number of outstanding currency units can be checked very easily. What I care about as a consumer is being able to predict the value of my currency at future times. Bitcoin doesn't allow me to do this at all.
- redblacktree 9y agoThis isn't really true. New USD is created anytime someone gets a loan. The Fed impacts that money creation only indirectly by setting rates (not considering QE -- even with QE, the point remains: new money is created when a loan is made by a fractional-reserve institution) Edit to further elucidate: It isn't exactly the loan that creates money, but what happens with the money after the loan. It will almost certainly land in a bank account somewhere, adding to that bank's reserves, which allows them to lend 90% of the loan's value again. (assuming a 10% capital reserve requirement)
- carc 9y agoThis is simply false.
- redblacktree 9y agoYour comment would be more useful if you attempted to address my misunderstandings, as you perceive them.
- pmontra 9y agoYou and I go to the bank and get two loans backed by the same reserve. We party and spend those new dollars which in part didn't exist before. Then we work to repay the bank and make the debt and credit columns agree in the books. Btw, the money of salaries we get could be borrowed too. Another shot at it with a thought experiment. Everybody goes to the bank and borrows 10k every month. The bank never asks them back for the first five years. Result? Inflation, possibly hyperinflation. Same as if they would be printing money (and they'll won't get anything back when the five years are past.)
- bb88 9y agoThis is known as the money multiplier effect. It's perhaps better put like this: You store a dollar in the bank. The bank makes a loan to a business to buy cars. The car company stores that dollar in another bank. The bank makes a loan with that dollar to a farmer to buy sheep from another farmer. That farmer who sold the sheep puts that dollar in the bank. That one dollar was used in three different transactions, thus creating more US Dollars than were actually printed. And on and on it goes. Edited to add: That's why runs on banks are so dangerous, because the bank never has the full amount of money in it's safe. It's using that money to make loans.