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SEC Commissioner Hester Peirce, a Republican on the agency’s five-member board, said Gensler’s recent warnings “conveyed the overly conservative approach that h

SEC Commissioner Hester Peirce, a Republican on the agency’s five-member board, said Gensler’s recent warnings “conveyed the overly conservative approach that has typified the SEC in the crypto arena.” She said the agency should move forward with approval of crypto funds on their merits. What are the "merits" of crypto [funds]? Separating ever greater fools from their money to enrich early adopters without actually engaging in any real economic activity? Money laundering? Tax evasion? Digital counterfeiting? (i.e. saying 1 USDT = 1 USD) Ransomware? Wasting energy? Here is a fact: Congress' reputation is in the toilet. If it wants to get a modicum of respect back then maybe it should take a firm stand against "crypto." Nothing is economically new or innovative or useful in crypto for legitimate, real world applications. Never in history has a successful government abdicated control of its currency. Control over legal tender is one of the core functions of government. If bitcoin is a currency then what it aims to do is not different from what Liberty Reserve or eGold aimed to do. At least eGold had some underlying real asset. Bitcoin is just made of air. Sorry "math." If bitcoin is an asset then its value is akin to underwater swamp land in florida. I.e. it is a fraud. No, people should not be able to just make a token on a whim and extract economic power in exchange for producing no real economic good. If Congress wants to take a stand it should firmly ban US banks from interacting with entities that relate to the fraudulent scheme that is Bitcoin, et al. Hester Pierce (wonder if there is a relation to Brock Pierce) is either really dull or really corrupt. Bitcoin has zero, actually negative economic value. It is ludicrous that an SEC chair would pretend it does simply because number big. Anybody remember the AAA securitisation of garbage mortgages a decade ago? Just because a financial product is in current market demand or has a high price does not mean that it is legitimate or that it has positive economic value. The job of congress and regulators is precisely to nip frauds like Bitcoin in the bud before they become bigger and wreck greater damage on the economy when they inevitably collapse or cause serious economic distortions (i.e. making billionaires out of early adopters who did not actually produce anything of value. The transfer of purchasing power from productive individuals to rent seeking individuals (i.e. those lobbying Congress to legitimise their Monopoly money) is a surefire way to harm an economy. So Ms. Pierce what exactly are the "merits" of Bitcoin? Please tell... This should not be a partisan issue. Just like printing fake dollars is not a partisan issue. Maybe Congress can do something right for a change...doubt it though...sadly.

antonvs 5y ago
> At least eGold had some underlying real asset. Bitcoin is just made of air. Sorry "math." eGold needed an underlying asset because it was a single company, and it needed to prove it was good for the obligations it was taking on, essentially. Bitcoin, by contrast, is more like a government fiat currency, except government fiat (theoretically backed by democratic mandate) is replaced by the voluntary choice of a large enough group of people to use it. The value of fiat currency comes purely from the wealth that it represents, with a stability guarantee provided by things like tax revenues being denominated in that currency. The value of cryptocurrency similarly comes from the wealth it represents, which is why ordinary users have to exchange fiat currencies to get crypto - it's a transfer of wealth from one system to another. And similarly, a certain amount of stability (but not nearly as much) is provided by the demand for the currency due notoriously to money laundering, the drug trade, evasion of capital controls, and probably even the odd above-board transactions. I'm not arguing for or against crypto, I'm just pointing out that this whole "made of air" argument applies equally to any currency, really. Even for currencies that are backed by some asset with supposed "intrinsic value", any asset with a finite quantity can't have enough value to represent all the wealth in a society, by definition, because its own value is included in that amount. The actual value represented by a wide-scale currency must be surplus to any intrinsic value. "Intrinsic value" and "asset backed" are essentially red herrings in all but the smallest contexts ( like eGold, which never got big enough for this to matter.)
- morpheos137 5y ago
  >The value of fiat currency comes purely from the wealth that it represents, with a stability guarantee provided by things like tax revenues being denominated in that currency. This is wrong or at least woefully incomplete. The value of a fiat (or any) currency comes from its utility as (1) a medium of exchange (2) a store of value and (3) a unit of account. If few people use a currency for buying or selling real (and legal) goods or services then it is a ineffective medium of exchange. If a currency is not legal tender (to your point) it may also be ineffective as a medium of exchange. Try paying your taxes with Bitcoin. Won't work. Bitcoin is not a stable store of value. (so 2 is not satisfied). You can not reliably store a certain fixed amount of purchasing power in your Bitcoin savings (Hodlings) for future use at an arbitrary future time. (3) Bitcoin is not a unit of account in any general sense. Goods and services are not priced in Bitcoin units. Thus Bitcoin fails the three prong test of whether an instrument may be considered a currency. If Bitcoin is not a currency, which it manifestly is not why don't we stop calling it one? Ok so it is an asset then? Right? Not really. An asset is something of tangible use and durable value something that can be subject to property rights. What is the use of Bitcoin? Can you live on the block chain? Can you sue other people if they steal your Bitcoin (e.g. is Bitcoin intellectual property?). No actually the only value in Bitcoin is that maybe you can find somebody who will pay a higher price (in dollars) than what you paid. Thus if Bitcoin claims to be an asset it is a fraudulent asset. Fundamental since Bitcoin has no physical underlying asset it is just a number. Nobody can own numbers. Nothing prevents anybody from duplicating a number. In fact this has happened multiple times when the blockchain forks. See Bitcoin Cash, etc.

antonvs 5y ago

> At least eGold had some underlying real asset. Bitcoin is just made of air. Sorry "math." eGold needed an underlying asset because it was a single company, and it needed to prove it was good for the obligations it was taking on, essentially. Bitcoin, by contrast, is more like a government fiat currency, except government fiat (theoretically backed by democratic mandate) is replaced by the voluntary choice of a large enough group of people to use it. The value of fiat currency comes purely from the wealth that it represents, with a stability guarantee provided by things like tax revenues being denominated in that currency. The value of cryptocurrency similarly comes from the wealth it represents, which is why ordinary users have to exchange fiat currencies to get crypto - it's a transfer of wealth from one system to another. And similarly, a certain amount of stability (but not nearly as much) is provided by the demand for the currency due notoriously to money laundering, the drug trade, evasion of capital controls, and probably even the odd above-board transactions. I'm not arguing for or against crypto, I'm just pointing out that this whole "made of air" argument applies equally to any currency, really. Even for currencies that are backed by some asset with supposed "intrinsic value", any asset with a finite quantity can't have enough value to represent all the wealth in a society, by definition, because its own value is included in that amount. The actual value represented by a wide-scale currency must be surplus to any intrinsic value. "Intrinsic value" and "asset backed" are essentially red herrings in all but the smallest contexts ( like eGold, which never got big enough for this to matter.)

morpheos137 5y ago
>The value of fiat currency comes purely from the wealth that it represents, with a stability guarantee provided by things like tax revenues being denominated in that currency. This is wrong or at least woefully incomplete. The value of a fiat (or any) currency comes from its utility as (1) a medium of exchange (2) a store of value and (3) a unit of account. If few people use a currency for buying or selling real (and legal) goods or services then it is a ineffective medium of exchange. If a currency is not legal tender (to your point) it may also be ineffective as a medium of exchange. Try paying your taxes with Bitcoin. Won't work. Bitcoin is not a stable store of value. (so 2 is not satisfied). You can not reliably store a certain fixed amount of purchasing power in your Bitcoin savings (Hodlings) for future use at an arbitrary future time. (3) Bitcoin is not a unit of account in any general sense. Goods and services are not priced in Bitcoin units. Thus Bitcoin fails the three prong test of whether an instrument may be considered a currency. If Bitcoin is not a currency, which it manifestly is not why don't we stop calling it one? Ok so it is an asset then? Right? Not really. An asset is something of tangible use and durable value something that can be subject to property rights. What is the use of Bitcoin? Can you live on the block chain? Can you sue other people if they steal your Bitcoin (e.g. is Bitcoin intellectual property?). No actually the only value in Bitcoin is that maybe you can find somebody who will pay a higher price (in dollars) than what you paid. Thus if Bitcoin claims to be an asset it is a fraudulent asset. Fundamental since Bitcoin has no physical underlying asset it is just a number. Nobody can own numbers. Nothing prevents anybody from duplicating a number. In fact this has happened multiple times when the blockchain forks. See Bitcoin Cash, etc.