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I never implied that currencies should be gold-backed (quite the opposite, in fact!) My point in this area is that one of the big features of a modern fiat curr

by exelius 13y ago

I never implied that currencies should be gold-backed (quite the opposite, in fact!) My point in this area is that one of the big features of a modern fiat currency is the ability of the central authority to react to market changes. This leads to price stability, which IMO is a defining feature of a modern, global currency. I'm not saying that that Bitcoin was poorly designed or anything; just that there are some big challenges with issuing currency if you don't have a nation-state backing it up. Nation-states have the ability to issue currency by policy, to remove currency from circulation through taxes, and resolve international disputes (with military force, if necessary.) Bitcoin, through its decentralized nature, has none of this. And before anyone checks in saying that it's impossible to get 51+% of the Bitcoin node network... you don't understand the level of resources that banks can bring to bear if they have the right motivation. I wouldn't be surprised if we see one or more of them collude to take over the Bitcoin cloud and print money for their own purposes. If they could do it with LIBOR, they can do it with Bitcoin. Goldman Sachs has been driving up the price of Aluminum by controlling a significant portion of the global stock and keeping it out of circulation. It's naive to think that these companies couldn't/wouldn't exploit the fact that Bitcoin is almost entirely unregulated: if they can get control of the node network and print money, it's not clear there's anything illegal about it.

lectrick 13y ago
> one of the big features of a modern fiat currency is the ability of the central authority to react to market changes This is also its Achilles' heel if this central authority acts poorly. There are MANY worldwide currencies which are very poorly managed. > you don't understand the level of resources that banks can bring to bear if they have the right motivation The Bitcoin mining network is now more powerful than ALL of the top 500 fastest computers COMBINED. So, good luck with that! > It's naive to think that these companies couldn't/wouldn't exploit the fact that Bitcoin is almost entirely unregulated: if they can get control of the node network and print money, it's not clear there's anything illegal about it. There isn't, but consider this: If word got out that this happened, people would flee Bitcoin, eliminating any incentive to do so, unless your only goal is destruction, and that's a pretty shitty motivation to do anything by.

by exelius 13y ago

lectrick 13y ago

> one of the big features of a modern fiat currency is the ability of the central authority to react to market changes This is also its Achilles' heel if this central authority acts poorly. There are MANY worldwide currencies which are very poorly managed. > you don't understand the level of resources that banks can bring to bear if they have the right motivation The Bitcoin mining network is now more powerful than ALL of the top 500 fastest computers COMBINED. So, good luck with that! > It's naive to think that these companies couldn't/wouldn't exploit the fact that Bitcoin is almost entirely unregulated: if they can get control of the node network and print money, it's not clear there's anything illegal about it. There isn't, but consider this: If word got out that this happened, people would flee Bitcoin, eliminating any incentive to do so, unless your only goal is destruction, and that's a pretty shitty motivation to do anything by.