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Senate hearing on Bitcoin [video]
- nostromo 13y agoIt's interesting to watch Jeremy Allaire repeatedly say that only well-funded companies should be trusted to hold consumers' bitcoins. Companies like, well, his.
- sliverstorm 13y agoIt's nothing new. You want banks to have considerable reserve capital, and if you are a company whose function is to "hold BTC" you are a bank.
- julespitt 13y agoThe definition of bank is not an entity that holds currency, otherwise any company or you or I are a bank. To keep it simple, Banks hold reserves because they lend. Paypal, for instance, is not a bank. If your tiny Bitcoin startup holds $1000 in bitcoin, and your obligations are $1000, I don't see the problem.
- sliverstorm 13y agoThe definition of bank is not an entity that holds currency Ok, you're right, that's an oversimplified view.
- camus2 13y ago> Paypal, for instance, is not a bank. Paypal is a bank in Europe. A paypal account is legally a bank account here.
- nostromo 13y agoIs fractional lending even possible with bitcoin? And, if not, why do you need reserve capital?
- sliverstorm 13y agoOf course it's possible. Customer A deposits 2 BTC to Bank A Bank A loans 1 BTC to Customer B Bank A is now a fractional reserve bank, with 50% of its outstanding debts to Customer A actually on-hand.
- a8da6b0c91d 13y agoBut it's kind of like going back to using doubloons as the actual currency, as opposed to certificates. I don't think in practice you could get anywhere like the reserve ratios typical now.
- sliverstorm 13y agoBanks can't print money, so as far as the day-to-day operations of the bank is concerned, the only practical difference between bank notes and doubloons is notes are much easier to process & store!
- moron4hire 13y agoBanks can effectively print money. They can take out loans from the Fed at effectively 0% interest rates, then lend out ten times as much to people. And they can lend to other banks, who they themselves can then lend ten times as much. Banks can print money.
- AnIrishDuck 13y agoSort of. Banks under fractional reserve are limited by a "reserve requirement" [1]. This limits the amount a bank can loan at any time. For example, the reserve requirement imposed on banks in the US today is at most 10% of the bank's liabilities [2]. Bitcoin would impose a 100% reserve requirement that is unheard of (as far as I can tell) in modern banking. I don't believe we can accurately predict the effects of this requirement. I also believe we can't state with any certainty that, given this requirement, a bitcoin banking system would behave at all alike to our current fractional reserve banking system. Frankly, this appears to be another area where bitcoin doesn't seem suited to handle the economic needs of the modern world. 1. http://en.wikipedia.org/wiki/Reserve_requirement http://en.wikipedia.org/wiki/Reserve_requirement 2. http://www.federalreserve.gov/monetarypolicy/reservereq.htm http://www.federalreserve.gov/monetarypolicy/reservereq.htm
- genericacct 13y agoBy the way, is this the same Jeremy Allaire that wrote coldfusion, which was acquired by adobe, and was exploited in the biggest privacy data breach in history?
- lazugod 13y agoWhy on Earth would that be relevant?
- genericacct 13y agoDoesn't seem like the kind of person who can give security lessons to anyone
- Jtsummers 13y agoThat depends on what he's learned. Not to mention, he hasn't had anything to do with the platform since 2003. I have no idea what he's done or learned in the intervening 10 years, but I'd hate people to judge me today on what I developed 10 years ago without considering what I've learned and developed since.
- dwaltrip 13y agoYeah that kind of pissed me off. It felt like he was promoting the moat that makes it harder for smaller teams to compete. You don't need to start with $10 million in capital to innovate in the bitcoin space. Especially if interfacing with banks is not a key aspect of the business. Accountability is important, however.
- yeukhon 13y agoYou should. There is a liability. You are thinking self financing with bitcoin, but when regulation comes public consumers will expect some degree of liability. And this needs capital, not 50k from your personal bank to keep your server running.
- thinkcomp 13y agoMy comments: http://www.aarongreenspan.com/writing/20131118.hsgacstatement.pdf http://www.aarongreenspan.com/writing/20131118.hsgacstatemen... Jerry Brito's testimony was quite good.
- sjcsjc 13y ago"You don't think it was Al Gore, do you?" - quip from the senator running the hearings on the subject of Satoshi's real identity.
- shmerl 13y agoThis looks very positive indeed.
- vinchuco 13y agoThis is great for those that invested just before the hearings. All the attention given to it will get more people in the US involved. I wonder how much longer can this growth last.
- oxalo 13y agoI think that depends on to what extent Bitcoin will replace the current money system. [1] looks into the price of Bitcoin if it becomes as widespread as Bitcoin or PayPal. [1] http://www.dailyfinance.com/2013/11/17/bitcoin-bubble-or-value/ http://www.dailyfinance.com/2013/11/17/bitcoin-bubble-or-val...
- pilom 13y agoI'm reminded of a course I took which was co-taught by the CTO at the Department of Homeland Security. He once said that "The criminals will always be better at using cryptography than the people who use them in positive ways."
- rhizome 13y agoExcept that the NSA and FBI have been defining crypto as suspicious activity, so kind of a double-bind there.
- maxk42 13y agoWell it's no wonder: they only use it for suspicious activities.
- dmix 13y agoThere's always been a fine line between a police officer and a criminal. Now apparently the same applies between intelligence agencies and black-hat hackers.
- sneak 13y agoCan't view without Flash, I won't install Flash, therefore I can't view.
- fuqua 13y agoSounds like a personal problem.
- sliverstorm 13y agoThat's your choice to make. You don't get to whine about it.
- saraid216 13y agoDo the Hacker News thing and spin up a VM with Flash on it, watch, and then delete the VM afterwards.
- idupree 13y agoThat works for technical reasons but not legal reasons. You can't "virtually" agree to the terms&conditions and then delete your agree-ment along with the VM. (Unless the terms or the law let you do so. Sometimes they do.)
- ywyrd 13y agoThat's why I never agree to any terms and conditions online.
- gknoy 13y agoWhat are the terms of the Flash EULA that you might violate while spinning up a VM to read something? You're not planning to copy it, publish it, etc, and since you're destroying the VM later you don't care about stability/etc -- outside of the reading event, you are not doing any actions with the product. I'm genuinely curious. I can understand an argument from principle like RMS might use, but I am unsure what the difference is between agreeing on a VM and agreeing not-on-a-VM. I'm really trying to see an edge case where doing it on a VM that you destroy later is in any way worse (or even different) than doing it on a laptop that you buy, use, and then later incinerate.
- eof 13y agoI've been watching since about 20 minutes in; it is overwhelmingly positive. There seem to be 2 'groups' of testimonies, the first coming from law enforcement and government bodies; the overwhelming consensus was that existing laws are satisfactory to prosecute bad actors using bitcoin. The second group is still talking; again extremely positive.. analogies to bitcoin being similar to the internet in the mid nineties; its scary but overall good. The lawyer from the bitcoin foundation is really driving home the idea that the main problem right now is that bankers are too scared to give bitcoin business bank accounts. I see overall nothing negative; and the chairman seems extremely reasonable and open to the notion of bitcoin and brought up the bitcoin-now <-> internet-in-the-nineties analogy himself. No one is asking for stricter laws, everyone is asking for clarity. Much, much more positive than I expected; only the secret service guy seemed to be very cautious; he never said the word bitcoin and mostly spent his time saying the secret service was awesome.
- yeukhon 13y agoThat's my feel too. The chair seems to be really really interested in bitcoin and how bitcoin works. They [the panel] repeatably mentioning Tor Foundation, Bitcoin Foundation partnership on dealing on this issue. I think the government, at least from the Senate's perspective, what is absent in regulating virtual concurrency. I am all for government and business regulating if the regulation benefit the public consumer (not deep web consumers) in the long run. They also praise the pros and cons of the bitcoin protocol, history of bitcoin and etc. Chair: "You don't think it was Al Gore [created the bitcoin], do you?" laughers Chair: "I like this quote from Mrs. Einstein: 'I understand the words but not the sentences.' Thanks the panel." Side note: I thought I saw Snowden... http://imgur.com/IaAPGjx http://imgur.com/IaAPGjx And the hearing record is only saved for 15 days...
- nateabele 13y ago> Side note: I thought I saw Snowden... http://imgur.com/IaAPGjx http://imgur.com/IaAPGjx I actually thought he looked a lot more like Tucker Carlson (the bow-tie wearing talking head who was verbally bitch-slapped by John Stewart on Carlson's ex-show, Crossfire).
- presidentender 13y agoPositive attitudes regarding Bitcoin by the powers that be give me pause. Why would law enforcement be eager to support a technology which, on the face of it, seems to reduce the power of law enforcement?
- crygin 13y agoI'm unclear on why everyone seems to think that Bitcoin reduces governmental power. It makes all transactions public -- no more cash deals, hard-to-subpoena international wire transfers, etc. It makes the job of law enforcement much easier.
- avar 13y agoIt doesn't reduce police powers, but in the long term if it pans out it'll reduce the power of fiat currency. That's what people talk about when they say it reduces the power of the government.
- sliverstorm 13y agoSure, but law enforcement isn't concerned with monetary policy and deficit spending.
- avar 13y agoThat's why people say it reduces "governmental power", not "law enforcement power". The "government" includes the organization that issues the fiat currency that you use. You could argue that the increase in law enforcement power would offset the decrease in power from not being able to issue fiat currency, but that would mostly be a silly line of argument to pursue.
- crygin 13y agoNot least because governmental power does not derive from the ability to issue fiat currency; it derives from a legal (or socially accepted) monopoly on force. Failure of a sanctioned fiat currency could reduce governmental legitimacy, but law enforcement is the backbone of governmental power.
- jdreaver 13y agoThe chairman asked the panel about the real identity of Satoshi Nakamoto, the pseudonym used by the creator or creators of Bitcoin. When one of the panelists was going to respond, the chair cut him off and said "you don't think it was Al Gore, do you?" The panelist said "well, he hasn't denied it!" I've never seen decent humor in a Senate hearing haha
- Systemic33 13y agoI was really surprised it was this discussed with this positive attitude, and with jokes and Einstein quotes. Interesting to watch coming from EU.
- sliverstorm 13y agoThe anonymity of Satoshi definitely gives the origins of BTC some mythos. I can picture historical fiction a hundred years from now speculating (assuming BTC takes over)
- jlgreco 13y agoI suspect that historians, given free access to a very very wide range of writings (and of course all the works attributed to Satoshi) and whatever the modern analysis techniques will be will make quick work of figuring out who Satoshi was. Few writings remain truly anonymous if the author also wrote significant amounts non-anonymously (and these days, who doesn't?). For his sake, I hope he isn't uncovered during his lifetime, but assuming bitcoin remains relevant I greatly suspect that history books will eventually have his name.
- mindslight 13y agoAlright, the market has remained irrational longer than I've remained solvent in resolve. So I'll admit it: This would have been a nice bandwagon to have jumped on. But hollow disruption porn and worse-is-better are still fucking tragedies.
- vijayboyapati 13y agoThis sounds very encouraging to me. A number of panelists have talked about how banks aren't allowing btc businesses to setup up basic checking accounts and how this needs to be fixed if the US isn't going to be left behind.
- EricDeb 13y agoThe FBI and government have considerable bitcoin holdings, assuming they acquired the silk road wealth + what they already have their total BTC is at least 524,000. src: https://bitcointalk.org/index.php?topic=321265.0 https://bitcointalk.org/index.php?topic=321265.0
- igravious 13y agoIs this the same entity that has ~ $16,000,000,000,000 external debt? source: a part of the government https://www.cia.gov/library/publications/the-world-factbook/rankorder/2079rank.html https://www.cia.gov/library/publications/the-world-factbook/...
- Zoomla 13y agoI heard PATRIOT Act....
- dangrossman 13y agoConsidering the PATRIOT Act is what established the "know your customer" due-diligence rules for financial institutions (i.e. why your bank wants to see ID when you open an account), there's nothing ominous about the name of that bill coming up.
- Ellipsis753 13y agoJust sold off my bitcoin at $700. Who knows where the price will go next. Hope I won't regret this too much... :)
- jjsz 13y agoWhere did you sell it?
- Ellipsis753 13y agoIt's an IRC channel called #bitcoin-otc-uk (they have ones for the usa etc too). I just talked to people and found someone who wanted to buy. They have a little rating system and someone who was online said they'd dealt with them before. So that was good enough for me as they had good reviews and seemed trustworthy. I then transfered the bitcoins and they sent the money by bank transfer. (We made the transaction publicly in the chatroom so that there'd be others to record it.) It wasn't too bad. If you want to buy/sell some I'd recommend this.
- jjsz 13y agoNice I got my first .XX BTC from the owner of colored coins. I can wait for the second senate hearing to go on here. I'll ask them for the US site.
- Ellipsis753 13y agoAh cool. When is the next senate hearing? I might consider buying my bitcoin back in case it goes up again for the hearing. :)
- jjsz 13y agoNot sure, but I'll be paying attention around the same time today. However, I'm tending to hold out until my father calls me asking about Bitcoin. By then it has gone mainstream.
- 13y ago
- namuol 13y agoKicking myself for all eternity... EDIT: Or not... [1] [1]: http://imgur.com/cp01D2m http://imgur.com/cp01D2m
- nisa 13y agoYou are not alone.
- deleted 13y ago[deleted]
- andy_ppp 13y agoOnce goods and services are available ubiquitously to buy in bitcoin fiat money will become worthless. This isn't a bubble IMO, it's just that USD won't hold it's value compared to available currency that has at least has some value. :-D
- presty 13y agorelated: http://www.businessinsider.com/ben-bernanke-on-bitcoin-2013-11 http://www.businessinsider.com/ben-bernanke-on-bitcoin-2013-... BERNANKE: Bitcoin 'May Hold Long-Term Promise'
- ademarre 13y agoIt's refreshing that the overall tone of the hearing is not one of 'we don't understand this cryptocurrency thing, we need to shut it down', but rather, 'this thing is happening, we have some concerns, but we need to adapt so we aren't left behind'.
- hgsigala 13y agoAs a staffer who works down the hall from this hearing, I am glad to see all the anti-Congress sentiment usually expressed on HN digressed for true discussion of subject matter.
- sehugg 13y agoWSJ: Despite interest in bitcoin, Monday's hearing was attended by only one member of the Senate panel, Sen. Tom Carper (D., Del.), who chairs the committee. Other senators were still en route to Washington after spending the weekend in their home states. Marketwatch: More than one hour into the hearing, and Sen. Carper is the sole lawmaker to ask questions. It appears no others are there. Embarassing.
- nilkn 13y agoSlightly off-topic, but I don't understand how a deflationary currency could be practical. Why would you ever spend it, except begrudgingly, if whatever you buy will be worth less tomorrow (thinking exclusively "in bitcoin," without regard to other currencies)? This is a question, not a criticism.
- eurleif 13y agoWhy would you spend your USD if you can convert it to BTC instead and it will be worth more tomorrow?
- deleted 13y ago[deleted]
- randartie 13y agoThe idea is that it will become stable.
- darkFunction 13y agoSpend when you need or really want something. Maybe the rampant consumerism associated with an inflationary currency is actually wasteful and destructive to the planet.
- SkyMarshal 13y agoThat's my thought too. Spend either when you really need something, or only things that appreciate rather than depreciate - home/real estate (barring housing bubbles), education, home manufacturing (3D printing), business investments, etc. Less on planned-obsolete cheap junk.
- crystaln 13y agoWhen you want something. A deflationary currency isn't much different from owning stock. Imagine you own $1000 in stock and want a TV. Would you ever sell to buy? Of course.