5 ms·

issues are coming up mostly because of interest based economy and multitude of instruments built on top of it. IMHO, even if whole banking system will be repla

issues are coming up mostly because of interest based economy and multitude of instruments built on top of it. IMHO, even if whole banking system will be replaced with bitcoin, interest based economy will be built on top of it and same instruments will be built with similar level of issues

pfannkuchen 4y ago
The difference is that a central authority doesn’t control the size of the bitcoin supply. It wouldn’t be a utopia, it would only fix a certain class of problems we have today.
- r_hoods_ghost 4y ago
  A central authority doesn't control the size of the money supply in our current economy either, as the vast majority of money is created by private banks and other institutions issuing loans.
  - lowkey 4y ago
    Those “private banks” are at least in theory heavily regulated by the central bank. The central bank controls interest rates and thereby the cost of money. They control the amount of base money in the system and they control the reserve ratio of “private banks” thereby controlling the amount of leverage banks can apply to deposits. A central bank most certainly controls every aspect of the money supply.
    - lowkey 4y ago
      Notably, the Fed set the reserve ratio for banks to zero percent in 2020 which absolutely contributed to this latest banking crisis. I am a bit surprised this hasn’t been mentioned as a contributing risk in the media, well not that surprised. [0] [0] https://www.federalreserve.gov/monetarypolicy/reservereq.htm https://www.federalreserve.gov/monetarypolicy/reservereq.htm
- ClumsyPilot 4y ago
  If the national goverbment loses control of thr moneu supply you will have auch a total disaster that current issues will look rosy. Just look at what happened to Greece, they cant control their fiscal policy and they have been stuck in the mud for 20 years. The same will happen to the world as a whole
  - dragonwriter 4y ago
    > Just look at what happened to Greece, they cant control their fiscal policy Who do you think controls Greece’s fiscal policy? (Before you answer, consider, what does “fiscal policy” refer to, and how is it different from “monetary policy”?)
    - ksenzee 4y ago
      Am I the only one who finds the Socratic method ill-suited to forums?
- georgeplusplus 4y ago
  You wouldn't want a central authority to control the size of your money supply this would certainly lead to abuse oppression and a dystopia.
  - kazen44 4y ago
    but in the end, an authority (usually centralised) does actually control the money supply. This is simply the case because our economic system is based around the idea that someone will punish those who do not play by the rules of this system, otherwise we would not even have any kind of financial system to speak off. Money is only worth something because of the rule of law, and the rule of law is only worth something because (central) authorities have the means the enforce the law (usually thanks to the monopoly on violence/imprisonment).
    - georgeplusplus 4y ago
      I am referring to the usa and creation of money supply. As another person pointed out one entity does not control the supply of money. The private banks are responsible for loaning(creating) new money. The fed just ensures those banks have the means to do so if market forces warrant it. Although I agree with your point, a large imposing centralized force will ultimately lead to a controlling singular entity over time in such a system. But won't go sk far to say thats the way it has to be.
- yazaddaruvala 4y ago
  If the US gov collected taxes in BTC and funded its budget in BTC and borrowed its loans in BTC and paid that interest in BTC, Then the US gov would have the ability to control the circulating supply of BTC. Think of it this way, BTC caps out, then the US gov HODLed 50% of all BTC for an uncertain amount of time (call it a decade). The rest of the world starts to take risks accordingly and make investment strategies based on “no possible inflation, because BTC”. After a decade+ of BTC HODL policy the US gov decides to release 5% it wouldn’t be “printing BTC” but it would still certainly be “quantitative easing” and the extra supply of BTC would result in very much the same inflation as we see today. There is no scenario where the largest governments of the world cannot directly control the supply of circulating money! (Which is the only money that really matters).
  - sebzim4500 4y ago
    Governments would have some control, much like large holders of an asset have a significant impact on its value by e.g. selling it all at once (see binance selling their FTT all at once). What they would not have is the ability to double the supply of the currency in 2 years for no apparent reason.
    - ben_w 4y ago
      Sure they do, they can just make a new cryptocurrency, say BritCoin, and mandate it's use for paying taxes and getting paid and receiving pension. You know, like they already do with this whole "fiat money" thing.
      - ChainOfFools 4y ago
        This is one of the reasons for the schizophrenic posture of Bitcoin maxi's toward government adoption - thus Central Bank adoption - of Bitcoin as legal tender, a la El salvador. I mean apart from the fact that this happening on a global scale would make them stupendously wealthy. But from a pragmatic standpoint, they also know that one advantage Bitcoin does not have, that fiat does, is an armed gang with orders to enforce its use by all citizens. Yet.
- deleted 4y ago
  [deleted]
- JumpCrisscross 4y ago
  > a central authority doesn’t control the size of the bitcoin supply What is the minimum number of natural persons required to fork Bitcoin to a larger supply? I’d wager it’s a number smaller than half of the Congress plus the President.
  - lowkey 4y ago
    Well there are currently over 14k bitcoin nodes securing the network. Even if you deployed 20k new nodes, more than doubling the number of existing nodes, to run a fork that supports an increase in supply, it still wouldn’t work. You would have to somehow take down the vast majority of nodes, many of which run on Tor. Notably, neither miners alone nor the core Bitcoin devs could force an increase in supply without the support of the majority of nodes. Note also, you can run a node on a Raspberry Pi so most node operators are regular folks securing the network for themselves. Bitcoin is run/secured by plebs, not whales. In the Blockwars of 2017 many large miners and custodial exchanges tried to increase the block size but were thwarted because the majority of nodes didn’t agree with the change. I think the 21 million cap is safe for the foreseeable future. If anything we may see a switch to Satoshis (Sats) as the default currency to replace Bitcoin. There are 1 Billion Sats per Bitcoin which should be more than enough for some time.
    - lowkey 4y ago
      Re-reading your comment with a different lens, the minimum number of natural persons required to fork Bitcoin to a larger supply is actually 1. That said, it would be a fork, responsible for producing its own hash power, and would not be recognized as Bitcoin since it wouldn’t be following the Bitcoin protocol. If you wanted to modify the Bitcoin protocol to support a larger supply, see my previous comment.

pfannkuchen 4y ago

The difference is that a central authority doesn’t control the size of the bitcoin supply. It wouldn’t be a utopia, it would only fix a certain class of problems we have today.

r_hoods_ghost 4y ago
A central authority doesn't control the size of the money supply in our current economy either, as the vast majority of money is created by private banks and other institutions issuing loans.
- lowkey 4y ago
  Those “private banks” are at least in theory heavily regulated by the central bank. The central bank controls interest rates and thereby the cost of money. They control the amount of base money in the system and they control the reserve ratio of “private banks” thereby controlling the amount of leverage banks can apply to deposits. A central bank most certainly controls every aspect of the money supply.
  - lowkey 4y ago
    Notably, the Fed set the reserve ratio for banks to zero percent in 2020 which absolutely contributed to this latest banking crisis. I am a bit surprised this hasn’t been mentioned as a contributing risk in the media, well not that surprised. [0] [0] https://www.federalreserve.gov/monetarypolicy/reservereq.htm https://www.federalreserve.gov/monetarypolicy/reservereq.htm
ClumsyPilot 4y ago
If the national goverbment loses control of thr moneu supply you will have auch a total disaster that current issues will look rosy. Just look at what happened to Greece, they cant control their fiscal policy and they have been stuck in the mud for 20 years. The same will happen to the world as a whole
- dragonwriter 4y ago
  > Just look at what happened to Greece, they cant control their fiscal policy Who do you think controls Greece’s fiscal policy? (Before you answer, consider, what does “fiscal policy” refer to, and how is it different from “monetary policy”?)
  - ksenzee 4y ago
    Am I the only one who finds the Socratic method ill-suited to forums?
georgeplusplus 4y ago
You wouldn't want a central authority to control the size of your money supply this would certainly lead to abuse oppression and a dystopia.
- kazen44 4y ago
  but in the end, an authority (usually centralised) does actually control the money supply. This is simply the case because our economic system is based around the idea that someone will punish those who do not play by the rules of this system, otherwise we would not even have any kind of financial system to speak off. Money is only worth something because of the rule of law, and the rule of law is only worth something because (central) authorities have the means the enforce the law (usually thanks to the monopoly on violence/imprisonment).
  - georgeplusplus 4y ago
    I am referring to the usa and creation of money supply. As another person pointed out one entity does not control the supply of money. The private banks are responsible for loaning(creating) new money. The fed just ensures those banks have the means to do so if market forces warrant it. Although I agree with your point, a large imposing centralized force will ultimately lead to a controlling singular entity over time in such a system. But won't go sk far to say thats the way it has to be.
yazaddaruvala 4y ago
If the US gov collected taxes in BTC and funded its budget in BTC and borrowed its loans in BTC and paid that interest in BTC, Then the US gov would have the ability to control the circulating supply of BTC. Think of it this way, BTC caps out, then the US gov HODLed 50% of all BTC for an uncertain amount of time (call it a decade). The rest of the world starts to take risks accordingly and make investment strategies based on “no possible inflation, because BTC”. After a decade+ of BTC HODL policy the US gov decides to release 5% it wouldn’t be “printing BTC” but it would still certainly be “quantitative easing” and the extra supply of BTC would result in very much the same inflation as we see today. There is no scenario where the largest governments of the world cannot directly control the supply of circulating money! (Which is the only money that really matters).
- sebzim4500 4y ago
  Governments would have some control, much like large holders of an asset have a significant impact on its value by e.g. selling it all at once (see binance selling their FTT all at once). What they would not have is the ability to double the supply of the currency in 2 years for no apparent reason.
  - ben_w 4y ago
    Sure they do, they can just make a new cryptocurrency, say BritCoin, and mandate it's use for paying taxes and getting paid and receiving pension. You know, like they already do with this whole "fiat money" thing.
    - ChainOfFools 4y ago
      This is one of the reasons for the schizophrenic posture of Bitcoin maxi's toward government adoption - thus Central Bank adoption - of Bitcoin as legal tender, a la El salvador. I mean apart from the fact that this happening on a global scale would make them stupendously wealthy. But from a pragmatic standpoint, they also know that one advantage Bitcoin does not have, that fiat does, is an armed gang with orders to enforce its use by all citizens. Yet.
deleted 4y ago
[deleted]
JumpCrisscross 4y ago
> a central authority doesn’t control the size of the bitcoin supply What is the minimum number of natural persons required to fork Bitcoin to a larger supply? I’d wager it’s a number smaller than half of the Congress plus the President.
- lowkey 4y ago
  Well there are currently over 14k bitcoin nodes securing the network. Even if you deployed 20k new nodes, more than doubling the number of existing nodes, to run a fork that supports an increase in supply, it still wouldn’t work. You would have to somehow take down the vast majority of nodes, many of which run on Tor. Notably, neither miners alone nor the core Bitcoin devs could force an increase in supply without the support of the majority of nodes. Note also, you can run a node on a Raspberry Pi so most node operators are regular folks securing the network for themselves. Bitcoin is run/secured by plebs, not whales. In the Blockwars of 2017 many large miners and custodial exchanges tried to increase the block size but were thwarted because the majority of nodes didn’t agree with the change. I think the 21 million cap is safe for the foreseeable future. If anything we may see a switch to Satoshis (Sats) as the default currency to replace Bitcoin. There are 1 Billion Sats per Bitcoin which should be more than enough for some time.
  - lowkey 4y ago
    Re-reading your comment with a different lens, the minimum number of natural persons required to fork Bitcoin to a larger supply is actually 1. That said, it would be a fork, responsible for producing its own hash power, and would not be recognized as Bitcoin since it wouldn’t be following the Bitcoin protocol. If you wanted to modify the Bitcoin protocol to support a larger supply, see my previous comment.