5 ms·
But can Bitcoin eliminate the Fed and have any meaningful impact on the US financial system if the big actors of such a system are steadily centralizing and con
by jmt_ 5y ago
But can Bitcoin eliminate the Fed and have any meaningful impact on the US financial system if the big actors of such a system are steadily centralizing and controlling it? How would Bitcoin be able to change anything if its "enemies" are embracing it and applying traditional banking approaches to it? I can't help but wonder if crypto will be the victim of embrace-extend-extinquish schemes.
I'm not sure Visa is small fry. Regular people will want the easiest way to utilize crypto and if they can go through means familiar to them, they probably will. If companies like Visa end up having a hand in the majority of crypto transaction some day then crypto is effectively owned by the system it's trying to fight.
- thebean11 5y agoBuilding centralized things on top of it is not the same as centralizing Bitcoin itself. None of it allows them to print more, or prevent you from making on chain transactions.
- lottin 5y ago> None of it allows them to print more What stops an exchange from crediting an account with newly created bitcoins just like commercial banks do?
- thebean11 5y agoYou mean giving out more BTC IOUs than they actually own BTC? Nothing does, but creating IOUs is not the same thing as printing actual currency/gold/BTC. edit: And by "nothing", I mean there's no technical barrier. There are certainly legal barriers if they are lying about reserves and falsifying audits..
- lottin 5y agoNo, I mean crediting an account with an amount of bitcoins that came from nowhere. This is how commercial banks create money, and I don't see the reason why crypto exchanges can't do the same with bitcoin.
- deleted 5y ago[deleted]
- thebean11 5y agoWhat do you mean by an "account"? They could not credit my BTC address with BTC they do not own, no. Obviously they could give me a login to a webpage showing I hold 10e99 BTC that I can't withdraw. They could do the same thing with gold bars and free Wendy's sandwiches. It's not the same thing as printing BTC, creating gold bars, or manufacturing actual sandwiches.
- lottin 5y agoWhat do you think printing BTC means? They don't have an actual printing press that prints bitcoins. Instead they create a transaction that credits a BTC address but debits no addresses, thus creating new bitcoins out of thin air. On the bitcoin blockchain the number of bitcoins that can be created in this way is limited, but off-chain there is no such limit. A bitcoin exchange can credit an internal account with a number of bitcoins that it has created out of thin air, in exactly the same way that bitcoins are created on-chain, in effect increasing the total supply of bitcoins.
- thebean11 5y ago> They don't have an actual printing press that prints bitcoins. Instead they create a transaction that credits a BTC address but debits no addresses, thus creating new bitcoins out of thin air. On the bitcoin blockchain the number of bitcoins that can be created in this way is limited, but off-chain there is no such limit. Crediting a Bitcoin address is an on-chain event, so I'm not sure what you mean. If the address was not credited on chain, my Bitcoin node will not reflect the new balance, so the credit simply did not happen from the perspective of any honest node on the network.
- lottin 5y agoThe transaction happens off-chain. If you struggle to understand this you need to look up "fractional reserve banking". As soon as crypto users flock to centralised payment platforms, fractional reserve banking becomes a possibility and the supply of bitcoins is no longer limited to 21 billion. In the real world, central bank money (which in the bitcoin world is the equivalent of on-chain bitcoins) represents only a small fraction of the money supply.