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Bitcoin Will Probably Never Be Embraced by the U.S. Government

41 points by louismerlin 9y ago

olivermarks 9y ago
IMO cryptocurrency is perfectly poised to be the global currency, transcending nation state central banks and leveraging fiat currency foundations via the bank for international settlements. https://en.wikipedia.org/wiki/Bank_for_International_Settlements https://en.wikipedia.org/wiki/Bank_for_International_Settlem... The interview with the ex kite surfer and trauma surgeon is his opinions based on his ICO
- Goladus 9y ago
  "Cryptocurrency" can't be "The" global currency since it's not one thing. It's a collection of currencies, and bitcoin itself won't be the global currency because there aren't enough bitcoin to be viable for that purpose in the long run.
  - olivermarks 9y ago
    Agreed right now it is a collection of currencies, just like all the different denominations of fiat currency (USD, Euro etc). It's not hard to see how a future universal cryptocurrency could emerge though...
moocowtruck 9y ago
as much as i want bitcoin i think it would be premature for the us govt to embrace bitcoin at this point.. the tech around all this stuff needs to seriously bake and be refined before seriously considering it
felipeko 9y ago
The title is so misleading. It's just a interview, and there's nothing in the interview that gives room for what the title is saying. > Barzilay: Do you believe Bitcoin will ever be embraced by the U.S. government? > Dr. Hosp: I think that the concept of virtual currencies will definitely be embraced, because they have a very transparent transaction ledger. So, we know exactly what’s been happening. With bank transfers, it’s quite hard, but with fiat money it’s impossible, so I think virtual currencies will see a huge uprise by governments. Whether governments will embrace Bitcoin - let’s see, but there is definitely value for people. Bitcoin is very difficult to hack, it’s almost impossible to steal if you use for example multi-signature bolt. And with TenX you can spend Bitcoin pretty much anywhere. So, this is the future to go. I don’t think that Bitcoin is going to be a currency, but it’s going to have status like gold.
johnwheeler 9y ago
"Probably Never" is wishful thinking. They will never. Full stop. Why would the U.S. government tolerate universal currency when it has something far more advantageous? A currency it controls every other currency is pegged to (including Bitcoin). More practically speaking, the government needs the ability to expand the money supply during financial crises. Bitcoin doesn't lend itself to any of those Keynesian tricks. And, government is not "afraid" of Bitcoin. Letting the experiment continue is more about laissez-faire capitalism than an inability to regulate crypto.
- felipeko 9y ago
  Government does not need this ability, it just wants it.
  - johnwheeler 9y ago
    My point is Government doesn't even need to "want it". It has it.
  - KirinDave 9y ago
    What does this mean? How does a government "need" or "not need" things?
    - felipeko 9y ago
      There are things a government needs, like revenue source and public servants, to exist or do its job. Government does not need to have its own currency for exist or to do its job. It's debatable that government having the ability to mess with monetary policy is a good thing. It may be working in US at the moment (and it will be hard to measure if it is helping or not), but there have been a lot of countries economically ruined because of that.
      - KirinDave 9y ago
        > Government does not need to have it's own currency for exist or to do it's job. Please provide evidence for this. It seems like most successful governments disagree.
kindfellow92 9y ago
What does this even mean? BTC is a commodity, the government wins via taxes when people make gains. That’s like saying the government will never embrace stocks or real estate.
- heisenbit 9y ago
  The limited number of BTC compared with the demand makes it less a commodity but more a collectible.
  - kindfellow92 9y ago
    Sure
erikb 9y ago
Bitcoin has achieved so much already that people considered impossible. If the government is not able to build their own competitor they'll certainly embrace it at some point.
ringaroundthetx 9y ago
Different people in the U.S. government will embrace bitcoin, because they are the people trading bitcoin now. The wealth will bring the influence and the influence will bring the power. Some people were flabbergasted when the Fed was buying Mortgage-Backed Securities off the open market, practically giving one group of people money, under the guise of stimulating AN economy. Different people are going to be flabbergasted when the Fed, under a different group's leadership, starts buying cryptocurrencies by the $ billions every month, practically giving another group of people money, under the guise of stimulating AN economy. And it will still be unaccountable to anyone that cares. The European Central Bank buys junk corporate bonds simply because a Goldman Sachs alumni wanted to. The Swiss National Bank buys equity, straight off the New York Stock Exchange, at valuations it can never make a profit from dividends from. The Central Bank of Japan buys equity and bonds. These institutions are funded by the future productivity of tax payers and can be exposed to heavy losses. It isn't out of the question that they will buy the spot market in crypto commodities in the future just because someone familiar with that market is heading the bank.
- alexasmyths 9y ago
  "practically giving one group of people money, under the guise of stimulating AN economy." It wasn't under the guise of anything but saving the US economy from a wicked meltdown of epic proportions. The dominos were set to all go down, the Fed kept a few of them up by rebalancing wealth. As you point out - viciously unfair - but better in the long run. FYI - a 'strict currency' is perhaps worse; crisis will happen. Strict currencies ties our boat to the dock, too much or too little water and we're all smoked. Moreover - outside of crises, the economy is dynamic - growing and shrinking, monetary policy helps manage that. A strict currency is better than a poorly managed currency, but a well managed currency is better than a strict currency.
  - etr-strike 9y ago
    > As you point out - viciously unfair - but better in the long run. That's your opinion, not fact. Banks are larger than ever. Inequality higher than ever. Housing more expensive than ever. The world is more unstable now than it was in 2008. Your definition of "better in the long run" is quite odd.
paloaltokid 9y ago
Like, duh. Of course the government won’t embrace Bitcoin. It’s an absolute threat to national sovereignty. Virtual currencies that are not anonymized - no problem. But not Bitcoin.
- alexasmyths 9y ago
  "It’s an absolute threat to national sovereignty" It's not a threat to anything but speculators bank accounts. Nobody is using BTC as a currency.
  - chipgap98 9y ago
    I feel like this is akin to saying amazon wasn't a threat to retailers when it first launched because no one was doing all of their shopping on Amazon at the time. There is certainly a ton of speculation going on in this space at the moment, but it seems foolish to write off the entire concept simply because some people are speculating
  - paloaltokid 9y ago
    Have you read Snow Crash?
meow_mix 9y ago
I need to block Forbes. The number of ads they put up is comparable, and quality of their content is comparable to buzzfeed nowadays
- gruez 9y ago
  You actually want to block forbes.com/sites/, which contains content from their "contributors " (aka bloggers they lent their name to )
- Goladus 9y ago
  I have adblock installed. Forbes throws up an obnoxious "ADBLOCK DETECTED!" interstitial when I visit, which is a great reminder that their content is rarely worth it anyway. ctrl-w
matchcohnn 9y ago
Why should the US government fear bitcoin?? - bitcoin isn't usable as a transactional currency. it costs $30-40 per transaction. Plus other currencies are gaining steam, and offering other choices for people to transact - bitcoin isn't rare to be a store of value.....everyday there's a new viable cryptocurrency springing up - bitcoin isn't safer than dollar.....it can drop 90% in any day; no official entity is going to prop it up and make sure it doesn't crash. it can be banned by countries (and has been by a few) - bitcoin isn't easy than square cash or wires.....it can take several weeks to send money. plus the transaction fees are high
LeoJiWoo 9y ago
The government will embrace Bitcoin, but not as a currency (unless we end the Federal Reserve and/or shift back to the gold standard).
oh_sigh 9y ago
I just can't imagine the world governments okaying the transfer of billions or trillions of dollars of wealth to people who largely just sat on a technology from the beginning. Wouldn't the US or some world body, if they were going to come around to blockchain tech, start their own with a more equitable distribution(or at least, distribution more in line with what currently exists).
DesiLurker 9y ago
My thinking is that bitcoin/cryptocurrencies dont have to be 'fully' embraced by govt, it just needs to be recognized as a valid asset class and the markets will do the rest. so long as its not too much of a pain to use/keep it will do just fine. what people dont grasp is that the reason govt or central banks dont like any other fiat is that it takes power to inflate away from them. so long as we have fixed references in form of btc/etc markets will ensure they work as inflation hedge (after an unspecified initial period of price discovery ;). In fact I do foresee BTC becoming a legit currency after few unstable currencies fail. You could argue this was essentially the role of gold but the main problem with gold is that its the central banks that started with biggest ownership of gold so its very susceptible to price manipulation and really un-auditable without some form of trust setup. both of those are not as much of concern with cryptocurrencies. TLDR: it will be an asset until it becomes a global currency.

41 points by louismerlin 9y ago

IMO cryptocurrency is perfectly poised to be the global currency, transcending nation state central banks and leveraging fiat currency foundations via the bank for international settlements. https://en.wikipedia.org/wiki/Bank_for_International_Settlements https://en.wikipedia.org/wiki/Bank_for_International_Settlem... The interview with the ex kite surfer and trauma surgeon is his opinions based on his ICO

Goladus 9y ago
"Cryptocurrency" can't be "The" global currency since it's not one thing. It's a collection of currencies, and bitcoin itself won't be the global currency because there aren't enough bitcoin to be viable for that purpose in the long run.
- olivermarks 9y ago
  Agreed right now it is a collection of currencies, just like all the different denominations of fiat currency (USD, Euro etc). It's not hard to see how a future universal cryptocurrency could emerge though...

moocowtruck 9y ago

as much as i want bitcoin i think it would be premature for the us govt to embrace bitcoin at this point.. the tech around all this stuff needs to seriously bake and be refined before seriously considering it

felipeko 9y ago

The title is so misleading. It's just a interview, and there's nothing in the interview that gives room for what the title is saying. > Barzilay: Do you believe Bitcoin will ever be embraced by the U.S. government? > Dr. Hosp: I think that the concept of virtual currencies will definitely be embraced, because they have a very transparent transaction ledger. So, we know exactly what’s been happening. With bank transfers, it’s quite hard, but with fiat money it’s impossible, so I think virtual currencies will see a huge uprise by governments. Whether governments will embrace Bitcoin - let’s see, but there is definitely value for people. Bitcoin is very difficult to hack, it’s almost impossible to steal if you use for example multi-signature bolt. And with TenX you can spend Bitcoin pretty much anywhere. So, this is the future to go. I don’t think that Bitcoin is going to be a currency, but it’s going to have status like gold.

johnwheeler 9y ago

"Probably Never" is wishful thinking. They will never. Full stop. Why would the U.S. government tolerate universal currency when it has something far more advantageous? A currency it controls every other currency is pegged to (including Bitcoin). More practically speaking, the government needs the ability to expand the money supply during financial crises. Bitcoin doesn't lend itself to any of those Keynesian tricks. And, government is not "afraid" of Bitcoin. Letting the experiment continue is more about laissez-faire capitalism than an inability to regulate crypto.

felipeko 9y ago
Government does not need this ability, it just wants it.
- johnwheeler 9y ago
  My point is Government doesn't even need to "want it". It has it.
- KirinDave 9y ago
  What does this mean? How does a government "need" or "not need" things?
  - felipeko 9y ago
    There are things a government needs, like revenue source and public servants, to exist or do its job. Government does not need to have its own currency for exist or to do its job. It's debatable that government having the ability to mess with monetary policy is a good thing. It may be working in US at the moment (and it will be hard to measure if it is helping or not), but there have been a lot of countries economically ruined because of that.
    - KirinDave 9y ago
      > Government does not need to have it's own currency for exist or to do it's job. Please provide evidence for this. It seems like most successful governments disagree.

kindfellow92 9y ago

What does this even mean? BTC is a commodity, the government wins via taxes when people make gains. That’s like saying the government will never embrace stocks or real estate.

heisenbit 9y ago
The limited number of BTC compared with the demand makes it less a commodity but more a collectible.
- kindfellow92 9y ago
  Sure

erikb 9y ago

Bitcoin has achieved so much already that people considered impossible. If the government is not able to build their own competitor they'll certainly embrace it at some point.

ringaroundthetx 9y ago

Different people in the U.S. government will embrace bitcoin, because they are the people trading bitcoin now. The wealth will bring the influence and the influence will bring the power. Some people were flabbergasted when the Fed was buying Mortgage-Backed Securities off the open market, practically giving one group of people money, under the guise of stimulating AN economy. Different people are going to be flabbergasted when the Fed, under a different group's leadership, starts buying cryptocurrencies by the $ billions every month, practically giving another group of people money, under the guise of stimulating AN economy. And it will still be unaccountable to anyone that cares. The European Central Bank buys junk corporate bonds simply because a Goldman Sachs alumni wanted to. The Swiss National Bank buys equity, straight off the New York Stock Exchange, at valuations it can never make a profit from dividends from. The Central Bank of Japan buys equity and bonds. These institutions are funded by the future productivity of tax payers and can be exposed to heavy losses. It isn't out of the question that they will buy the spot market in crypto commodities in the future just because someone familiar with that market is heading the bank.

alexasmyths 9y ago
"practically giving one group of people money, under the guise of stimulating AN economy." It wasn't under the guise of anything but saving the US economy from a wicked meltdown of epic proportions. The dominos were set to all go down, the Fed kept a few of them up by rebalancing wealth. As you point out - viciously unfair - but better in the long run. FYI - a 'strict currency' is perhaps worse; crisis will happen. Strict currencies ties our boat to the dock, too much or too little water and we're all smoked. Moreover - outside of crises, the economy is dynamic - growing and shrinking, monetary policy helps manage that. A strict currency is better than a poorly managed currency, but a well managed currency is better than a strict currency.
- etr-strike 9y ago
  > As you point out - viciously unfair - but better in the long run. That's your opinion, not fact. Banks are larger than ever. Inequality higher than ever. Housing more expensive than ever. The world is more unstable now than it was in 2008. Your definition of "better in the long run" is quite odd.

paloaltokid 9y ago

Like, duh. Of course the government won’t embrace Bitcoin. It’s an absolute threat to national sovereignty. Virtual currencies that are not anonymized - no problem. But not Bitcoin.

alexasmyths 9y ago
"It’s an absolute threat to national sovereignty" It's not a threat to anything but speculators bank accounts. Nobody is using BTC as a currency.
- chipgap98 9y ago
  I feel like this is akin to saying amazon wasn't a threat to retailers when it first launched because no one was doing all of their shopping on Amazon at the time. There is certainly a ton of speculation going on in this space at the moment, but it seems foolish to write off the entire concept simply because some people are speculating
- paloaltokid 9y ago
  Have you read Snow Crash?

meow_mix 9y ago

I need to block Forbes. The number of ads they put up is comparable, and quality of their content is comparable to buzzfeed nowadays

gruez 9y ago
You actually want to block forbes.com/sites/, which contains content from their "contributors " (aka bloggers they lent their name to )
Goladus 9y ago
I have adblock installed. Forbes throws up an obnoxious "ADBLOCK DETECTED!" interstitial when I visit, which is a great reminder that their content is rarely worth it anyway. ctrl-w

matchcohnn 9y ago

Why should the US government fear bitcoin?? - bitcoin isn't usable as a transactional currency. it costs $30-40 per transaction. Plus other currencies are gaining steam, and offering other choices for people to transact - bitcoin isn't rare to be a store of value.....everyday there's a new viable cryptocurrency springing up - bitcoin isn't safer than dollar.....it can drop 90% in any day; no official entity is going to prop it up and make sure it doesn't crash. it can be banned by countries (and has been by a few) - bitcoin isn't easy than square cash or wires.....it can take several weeks to send money. plus the transaction fees are high

LeoJiWoo 9y ago

The government will embrace Bitcoin, but not as a currency (unless we end the Federal Reserve and/or shift back to the gold standard).

oh_sigh 9y ago

I just can't imagine the world governments okaying the transfer of billions or trillions of dollars of wealth to people who largely just sat on a technology from the beginning. Wouldn't the US or some world body, if they were going to come around to blockchain tech, start their own with a more equitable distribution(or at least, distribution more in line with what currently exists).

DesiLurker 9y ago

My thinking is that bitcoin/cryptocurrencies dont have to be 'fully' embraced by govt, it just needs to be recognized as a valid asset class and the markets will do the rest. so long as its not too much of a pain to use/keep it will do just fine. what people dont grasp is that the reason govt or central banks dont like any other fiat is that it takes power to inflate away from them. so long as we have fixed references in form of btc/etc markets will ensure they work as inflation hedge (after an unspecified initial period of price discovery ;). In fact I do foresee BTC becoming a legit currency after few unstable currencies fail. You could argue this was essentially the role of gold but the main problem with gold is that its the central banks that started with biggest ownership of gold so its very susceptible to price manipulation and really un-auditable without some form of trust setup. both of those are not as much of concern with cryptocurrencies. TLDR: it will be an asset until it becomes a global currency.