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There's a lot of attempts these days at conflating central bank digital currencies (e.g. "digital dollars") and crypto-currencies (e.g. Bitcoin). I think it's

There's a lot of attempts these days at conflating central bank digital currencies (e.g. "digital dollars") and crypto-currencies (e.g. Bitcoin). I think it's very important to point out something that may be obvious to some, but likely not to all: these two things are the exact opposite of one another. One is centrally controlled, the other is decentralized. One has potentially infinite supply an can be used by governments to grow the debt to infinity, the other has a mathematically demonstrably finite supply. One is a potentially very dangerous way for a government to have absolute control over what money is used for, the other - while not perfect in that regard - tries to be at least obfuscate what money is used for and by whom. One allows a government to blacklist users that they deem unworthy, the other is designed so that can never happen. One is a tool to curb freedom and make the job of government as easy as possible, the other is designed to enhance freedom, restrict government control over its citizens and be an escape hatch whenever governments become unbearably controlling. I am very glad to see that at least some politicians understand that a digital dollar would be a catastrophe for freedom and are pushing back against it.

akira2501 4y ago
> the other has a mathematically demonstrably finite supply. The argument I always hear against this point is that you can simply continue to subdivide the currency infinitely. We just get into smaller and smaller fractions of "satoshi's" or whatever the base unit may be. > tries to be at least obfuscate what money is used for and by whom. It really doesn't in any meaningful way. I'd suggest the true benefit is that there is no centralized preconditions on what transactions can be added to the ledger. Any two valid addresses can always transact if they pay the ledger fee. > the other is designed to enhance freedom It's designed to not have centralized control outside of 51% attacks. Whether that actually "enhances freedom" remains to be proven. Having to tether yourself to the internet and pay a fee on every transaction may strongly work against this actual point in practice.
- deleted 4y ago
  [deleted]
- LawTalkingGuy 4y ago
  >> the other has a mathematically demonstrably finite supply. > The argument I always hear against this point is that you can simply continue to subdivide the currency infinitely. We just get into smaller and smaller fractions of "satoshi's" or whatever the base unit may be. That's a different problem, that's the market-cap / # of coins issue. You don't spend an integer number of bitcoin, you spend the fraction you need, so it's not really a problem. The PP was talking about how Bitcoin was devised to not allow anyone to arbitrarily make more coins. (Some BTC forks have different minting policies, but BTC itself can't be changed.) Our central banks on the other hand, were devised precisely to allow the government to create money when needed. There's no way the USA would adopt BTC as its central currency for example because it would lose that ability.
  - ur-whale 4y ago
    > There's no way the USA would adopt BTC as its central currency for example because it would lose that ability. Yup. A government surrendering their ability to print money is unthinkable. They'd be giving up a major policy enforcement tool. To quote the obviously relevant: "“Give me control of a nation’s money supply, and I care not who makes its laws.” So said Mayer Amschel Rothschild, founder of the Rothschild banking dynasty.
- lumost 4y ago
  A currency which naturally grows in value is self defeating. Currencies, by their nature, are abstract constructs devoid of value. Now imagine that just by holding onto money, you made more money- no need for pesky investments or risk. If btc became the dominant currency, it would quickly become a regressive tax on people who actually need to spend money.
  - ur-whale 4y ago
    > A currency which naturally grows in value is self defeating. An opinion, neither backed by any obvious nor posted arguments. > Currencies, by their nature, are abstract constructs devoid of value. My above remarks goes triple for this one. Bordering on the dogmatic as a matter of fact. > If btc became the dominant currency I don't think that'll ever happen. First because Bitcoin isn't very practical as a currency - it's pretty obvious at this point -. Second and much more importantly: Bitcoin is an should remain an escape hatch. Every functioning human organization needs checks and balances to be functional. For every power, there needs to be a counter-power so that said power can't be abused. Until very recently, there was pretty much no counter power when it comes to the ability of governments to debase their currency (aka imposing a hidden tax on their citizenry). Bitcoin is exactly this: it is a counter-power that finally allows folks to run with their wealth if a government starts to mismanage their currency (and historically they have always proven that given enough time, they will). I would never wish for Bitcoin to become the dominant currency. It's perfect where it's at right now.
- ur-whale 4y ago
  > The argument I always hear against this point is that you can simply continue to subdivide the currency infinitely. We just get into smaller and smaller fractions of "satoshi's" or whatever the base unit may be. You can subdivide Bitcoin to a very tiny fraction indeed, and in that sense, the supply is quasi infinite. However, if you own _one_ Bitcoin, you own exactly 1/21millionth of the entire supply of the stuff there will ever be, and that will never change for as long as you hold on to it. In that sense, the supply is absolutely finite. A close analogy is gold: if you assume for a second that there is a finite amount of gold on the planet (not an unreasonable assumption), then: you could cut up a gold coin down to its individual atoms, and that would be a whole effing lot of them (not practical, obviously, which is why gold didn't last as a currency. OTOH, Bitcoin, being digital doesn't have that problem). And if you own one ounce of gold, you own a never-changing fraction of the supply. So: Gold supply, according to definition one (divisibility) is infinite. But according to definition two (they don't make any more of the stuff), it's finite. I am of the opinion that the second definition is the one that matters when it comes to understanding the properties of Bitcoin as a financial instrument.
mupuff1234 4y ago
> One allows a government to blacklist users that they deem unworthy, the other is designed so that can never happen Seems pretty easy to blacklist a crypto wallet address.
- longitudinal93 4y ago
  Superficially yes. But it's much harder in practise than you think.
tromp 4y ago
> One has potentially infinite supply an can be used by governments to grow the debt to infinity, the other has a mathematically demonstrably finite supply. The supply being finite is not that relevant. The relevant part is that the supply is predetermined, and that yearly supply inflation is acceptably small [1]. [1] https://john-tromp.medium.com/a-case-for-using-soft-total-supply-1169a188d153 https://john-tromp.medium.com/a-case-for-using-soft-total-su...
- ur-whale 4y ago
  > The supply being finite is not that relevant. The relevant part is that the supply is predetermined, and that yearly supply inflation is acceptably small [1]. Yeah, some folks - notably the Ethereum crowd IIRC - are of that opinion. I'll confess that I'm sort of undecided on the topic. In fact, I believe the overall effect are identical (because the currency can be divided to quasi infinity). But my gut tells me that finite supply is better. Also, with finite supply, the math involved in anything forward looking is most certainly simpler. However, I do agree that predetermined is way nicer than the amount of currency injected in the economy being controlled by whomever corrupt asshat is in control of the central bank at a given point in time.
tzs 4y ago
> One is a tool to curb freedom and make the job of government as easy as possible, the other is designed to enhance freedom, restrict government control over its citizens and be an escape hatch whenever governments become unbearably controlling. The flaw there is that if too many people use something like Bitcoin as an escape hatch from an unbearably controlling government, that government can close the escape hatch by becoming even more controlling. You can't actually do anything physical with Bitcoin. For all your physical needs you have to trade your Bitcoin with someone for the physical goods, either directly or indirectly. An unbearably controlling government could focus its monitoring on the physical goods, and make it illegal to buy physical goods using anything other than the official government currency. They could require all banking to be done at a government bank or at banks that report everything to the government.
- ur-whale 4y ago
  You're assuming the world is a single country. It isn't.
  - tzs 4y ago
    If I live in my country I need my physical goods to be my country with me. If my country becomes unbearably controlling they can restrict imports so that I can only buy and import foreign goods if I can prove I paid for them in my country's official country earned in the official economy. The existence of other countries does give me the option of emigrating from my country if there is a less controlling country that will allow me in.

akira2501 4y ago

> the other has a mathematically demonstrably finite supply. The argument I always hear against this point is that you can simply continue to subdivide the currency infinitely. We just get into smaller and smaller fractions of "satoshi's" or whatever the base unit may be. > tries to be at least obfuscate what money is used for and by whom. It really doesn't in any meaningful way. I'd suggest the true benefit is that there is no centralized preconditions on what transactions can be added to the ledger. Any two valid addresses can always transact if they pay the ledger fee. > the other is designed to enhance freedom It's designed to not have centralized control outside of 51% attacks. Whether that actually "enhances freedom" remains to be proven. Having to tether yourself to the internet and pay a fee on every transaction may strongly work against this actual point in practice.

deleted 4y ago
[deleted]
LawTalkingGuy 4y ago
>> the other has a mathematically demonstrably finite supply. > The argument I always hear against this point is that you can simply continue to subdivide the currency infinitely. We just get into smaller and smaller fractions of "satoshi's" or whatever the base unit may be. That's a different problem, that's the market-cap / # of coins issue. You don't spend an integer number of bitcoin, you spend the fraction you need, so it's not really a problem. The PP was talking about how Bitcoin was devised to not allow anyone to arbitrarily make more coins. (Some BTC forks have different minting policies, but BTC itself can't be changed.) Our central banks on the other hand, were devised precisely to allow the government to create money when needed. There's no way the USA would adopt BTC as its central currency for example because it would lose that ability.
- ur-whale 4y ago
  > There's no way the USA would adopt BTC as its central currency for example because it would lose that ability. Yup. A government surrendering their ability to print money is unthinkable. They'd be giving up a major policy enforcement tool. To quote the obviously relevant: "“Give me control of a nation’s money supply, and I care not who makes its laws.” So said Mayer Amschel Rothschild, founder of the Rothschild banking dynasty.
lumost 4y ago
A currency which naturally grows in value is self defeating. Currencies, by their nature, are abstract constructs devoid of value. Now imagine that just by holding onto money, you made more money- no need for pesky investments or risk. If btc became the dominant currency, it would quickly become a regressive tax on people who actually need to spend money.
- ur-whale 4y ago
  > A currency which naturally grows in value is self defeating. An opinion, neither backed by any obvious nor posted arguments. > Currencies, by their nature, are abstract constructs devoid of value. My above remarks goes triple for this one. Bordering on the dogmatic as a matter of fact. > If btc became the dominant currency I don't think that'll ever happen. First because Bitcoin isn't very practical as a currency - it's pretty obvious at this point -. Second and much more importantly: Bitcoin is an should remain an escape hatch. Every functioning human organization needs checks and balances to be functional. For every power, there needs to be a counter-power so that said power can't be abused. Until very recently, there was pretty much no counter power when it comes to the ability of governments to debase their currency (aka imposing a hidden tax on their citizenry). Bitcoin is exactly this: it is a counter-power that finally allows folks to run with their wealth if a government starts to mismanage their currency (and historically they have always proven that given enough time, they will). I would never wish for Bitcoin to become the dominant currency. It's perfect where it's at right now.
ur-whale 4y ago
> The argument I always hear against this point is that you can simply continue to subdivide the currency infinitely. We just get into smaller and smaller fractions of "satoshi's" or whatever the base unit may be. You can subdivide Bitcoin to a very tiny fraction indeed, and in that sense, the supply is quasi infinite. However, if you own _one_ Bitcoin, you own exactly 1/21millionth of the entire supply of the stuff there will ever be, and that will never change for as long as you hold on to it. In that sense, the supply is absolutely finite. A close analogy is gold: if you assume for a second that there is a finite amount of gold on the planet (not an unreasonable assumption), then: you could cut up a gold coin down to its individual atoms, and that would be a whole effing lot of them (not practical, obviously, which is why gold didn't last as a currency. OTOH, Bitcoin, being digital doesn't have that problem). And if you own one ounce of gold, you own a never-changing fraction of the supply. So: Gold supply, according to definition one (divisibility) is infinite. But according to definition two (they don't make any more of the stuff), it's finite. I am of the opinion that the second definition is the one that matters when it comes to understanding the properties of Bitcoin as a financial instrument.

mupuff1234 4y ago

> One allows a government to blacklist users that they deem unworthy, the other is designed so that can never happen Seems pretty easy to blacklist a crypto wallet address.

longitudinal93 4y ago
Superficially yes. But it's much harder in practise than you think.

tromp 4y ago

> One has potentially infinite supply an can be used by governments to grow the debt to infinity, the other has a mathematically demonstrably finite supply. The supply being finite is not that relevant. The relevant part is that the supply is predetermined, and that yearly supply inflation is acceptably small [1]. [1] https://john-tromp.medium.com/a-case-for-using-soft-total-supply-1169a188d153 https://john-tromp.medium.com/a-case-for-using-soft-total-su...

ur-whale 4y ago
> The supply being finite is not that relevant. The relevant part is that the supply is predetermined, and that yearly supply inflation is acceptably small [1]. Yeah, some folks - notably the Ethereum crowd IIRC - are of that opinion. I'll confess that I'm sort of undecided on the topic. In fact, I believe the overall effect are identical (because the currency can be divided to quasi infinity). But my gut tells me that finite supply is better. Also, with finite supply, the math involved in anything forward looking is most certainly simpler. However, I do agree that predetermined is way nicer than the amount of currency injected in the economy being controlled by whomever corrupt asshat is in control of the central bank at a given point in time.

tzs 4y ago

> One is a tool to curb freedom and make the job of government as easy as possible, the other is designed to enhance freedom, restrict government control over its citizens and be an escape hatch whenever governments become unbearably controlling. The flaw there is that if too many people use something like Bitcoin as an escape hatch from an unbearably controlling government, that government can close the escape hatch by becoming even more controlling. You can't actually do anything physical with Bitcoin. For all your physical needs you have to trade your Bitcoin with someone for the physical goods, either directly or indirectly. An unbearably controlling government could focus its monitoring on the physical goods, and make it illegal to buy physical goods using anything other than the official government currency. They could require all banking to be done at a government bank or at banks that report everything to the government.

ur-whale 4y ago
You're assuming the world is a single country. It isn't.
- tzs 4y ago
  If I live in my country I need my physical goods to be my country with me. If my country becomes unbearably controlling they can restrict imports so that I can only buy and import foreign goods if I can prove I paid for them in my country's official country earned in the official economy. The existence of other countries does give me the option of emigrating from my country if there is a less controlling country that will allow me in.