4 ms·
The real power imbalance is the Central Bank's power to confiscate wealth by inflating it away aka money printing, and not to forget the confiscation of physica
by silentsea90 6y ago
The real power imbalance is the Central Bank's power to confiscate wealth by inflating it away aka money printing, and not to forget the confiscation of physical gold by the US in 1933 (thanks FDR). There is a reason why countries decoupled from the gold standard to fund WW1. They got near infinite access to the nation's wealth. The loser of WW1 ie Germany eventually suffered hyperinflation, as have countries like Zimbabwe and Venezuela recently. Should Governments have the power over your money to the extent of making it go down to zero? That's what happened in all of these cases.
So no, BTC != USD
- warkdarrior 6y agoThe GP's point is that even if we switch to Bitcoin completely, there will still be a hierarchy of financial players, with regular people at the bottom, just like in the current system. There are ~150MM people working in US, so let's say that only these 150MM need to perform financial transactions (get paid, pay others, etc.). How many of these 150MM will be direct participants in Bitcoin? If not all of them are miners, there will be some necessary centralization. Why should anyone trust the 10,000+ Bitcoin miners? Do I as a regular user have more freedom when dealing with these 10,000 miners vs the 4,000+ US banks?
- silentsea90 6y agoThe problem isn't with US banks but central banks, and it isn't with concentration of wealth but confiscation of wealth through money printing We very well might have Coinbase, BlockFi etc. act as crypto banks, and BTC whales as the new rich. That's reward for their work and belief. What do you think is the threat vector from BTC miners? The protocol nullifies such threats. What would be bad is if a central authority could confiscate your work output at its leisure. That's the real battle here
- terse_malvolio 6y agoCoinbase is not decoupled from government
- silentsea90 6y agoIt certainly isn't. Hence, we will continue to have taxes and regulation. However, the BTC mantra is "not your keys not your coin". So if you leave it on Coinbase, you are welcoming attack by nation states to confiscate your cryptocurrency. This isn't an imagined threat. The confiscation of gold by FDR was a very real event that forced citizens to sell gold to the Government at a fixed price (of USD that the state printed at a whim) https://en.wikipedia.org/wiki/Executive_Order_6102 https://en.wikipedia.org/wiki/Executive_Order_6102
- jcranmer 6y agoAnd what stops the bitcoin miners from collectively deciding that their current bitcoin reward is too puny and changing the code to give them 1M bitcoin per block?
- yazaddaruvala 6y agoCompetition between cryptos? If BTC miners band together to cause inflation, then people migrate to ETH or <insert other crypto>. BTC loses value, and them miners have 1. not gained value even with the extra 1M BTC per block, and 2. lost value because their mining rigs generate less value per energy unit.
- silentsea90 6y agoMiners access to change the code is the same as you and I. Bitcoin is open source and code changes are reviewed by layers and layers of developers and approvers. Take a look here: https://bitcoin.org/en/development#code-review https://bitcoin.org/en/development#code-review Not to mention, they literally have $ millions in vested interest in the success of BTC by virtue of setup and mining costs. Such a move, even hypothetically, unless it is justified somehow, will cause loss of faith in the value of BTC and the fall in the value of BTC will make them lose value in mining as they earn these in BTC as well.