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> This comparison is so erroneous that it's embarrassing Not disagreeing with you, but it would be nice if you could elaborate on that, rather than just statin

by vog 13y ago

> This comparison is so erroneous that it's embarrassing Not disagreeing with you, but it would be nice if you could elaborate on that, rather than just stating that you disagree with the article.

atmosx 13y ago
Democracy (orig: Δημοκρατία) it means "the rule of people", in the sense that people who are part of this socio-political happening are able to take part in the decision process in direct or indirect ways. The current system Today we have the ECB (I'm Greek) and you (I take for granted that most of you are from the US) the FED. So let's talk about the FED. The U.S. Congress established three key objectives for monetary policy in the Federal Reserve Act: Maximum employment, stable prices, and moderate long-term interest rates. From Wikipedia we can read: Before the founding of the Federal Reserve System, the United States underwent several financial crises. A particularly severe crisis in 1907 led Congress to enact the Federal Reserve Act in 1913. Today the Federal Reserve System has responsibilities in addition to ensuring the stability of the financial system. To simplify it more: You may or may not like the FED but it's main object is currency stability. Every US citizen chooses a candidate of a political party. This candidate, if elected, goes to congress. The senate and the US President, both elected by the majority of voters[1], appoint[2] the "chair of the FED". Now this is a DEMOCRATIZED process, although indirect: You don't get to vote directly for the chairman of the FED. There are arguments for and against this process, probably studies on how to make it less prone to corruption and so forth, but ultimately the voter's choice shapes the candidates and their odds. The FED uses inflation or deflation, in order to promote and ensure stability a central power, controlled by the government and indirectly by the people, must have the power create new money on demand (thus create inflation) or deflate the money (thus create deflation) according to what the economy (i.e. the large amount of the population) needs. Enter Bitcoin In bitcoin we have a crypto-currency which offers strong anonymity. There is no central control, so the currency inflates[4] or deflates according to the market. That's all good and well and may even work for a while, but if a strong player enters the market then he can make it go up, down and side-ways as he see fit. So, say you have a player owning as much as 20% of bitcoin. If he cashes out the price goes down. If he cashes the price flies up and so forth. By selling at price A+10 and buying double the amounts at price A-10 he could easily double his amounts by out-playing the market. That's not moral, but legal. Now, in wall street there are authorities against this sort of behavior (they don't act as expected of course, but still you have some sort of control and you have always the government that if decides at some point in time to become more responsible towards tax-payers it can regulate the financial market overnight). According to a paper by none other than Adi Shamir (one of the three founders of the RSA algorithm), 98% of BTC belongs to 2% of portfolios. Hence it's expected from them to act in an immoral self-serving way in the long run. So, did Satoshi democratize the financial system? No, not really. He did the opposite: He create a system which turned the shark totally loose. Of course, the average programmer who doesn't understand much about economics - and we have a huge amount here on HN, more than believed for sure - it seems as if the bitcoin set's him free from the bank but that's not exactly the true. The problem with people vs banks are not the extra fees on money transfers: The problem is people NOT having money to put on the bank. Bitcoin doesn't make you rich. If you are rich you have just one extra toy. If you don't have money, there's no way you could buy bitcoin. Mining? Sure, but minings costs equipment. Only early adopters got an edge and made some money out of the huge price-spike. But this price-spike does promote, hoarding and opportunistic behaviors and in no way promotes democracy. So although the bitcoin protocol is a huge step forward, because adjusts the double spending problem introducing a public ledger, the currency is useful as it has some attributes which you can't find elsewhere (speed, portability, etc.), but it's in no way more democratic or decentralized as many bigots would like to believe. Sorry the long post and any grammar mistakes, it's late here and I'm kinda sleepy. [1] In the US we have small % of population voting. That's an interesting problem: how to get larger part of the population interested in elections? [2] http://en.wikipedia.org/wiki/Chair_of_the_Federal_Reserve#Appointment_process http://en.wikipedia.org/wiki/Chair_of_the_Federal_Reserve#Ap... [3] http://en.wikipedia.org/wiki/Black_Wednesday http://en.wikipedia.org/wiki/Black_Wednesday [4] Bitcoin was not designed to be inflation: It's deflationary on purpose. No one would had any reason to own bitcoin if they were inflationary since you can't pay taxes with BTC.

by vog 13y ago

> This comparison is so erroneous that it's embarrassing Not disagreeing with you, but it would be nice if you could elaborate on that, rather than just stating that you disagree with the article.

atmosx 13y ago

Democracy (orig: Δημοκρατία) it means "the rule of people", in the sense that people who are part of this socio-political happening are able to take part in the decision process in direct or indirect ways. The current system Today we have the ECB (I'm Greek) and you (I take for granted that most of you are from the US) the FED. So let's talk about the FED. The U.S. Congress established three key objectives for monetary policy in the Federal Reserve Act: Maximum employment, stable prices, and moderate long-term interest rates. From Wikipedia we can read: Before the founding of the Federal Reserve System, the United States underwent several financial crises. A particularly severe crisis in 1907 led Congress to enact the Federal Reserve Act in 1913. Today the Federal Reserve System has responsibilities in addition to ensuring the stability of the financial system. To simplify it more: You may or may not like the FED but it's main object is currency stability. Every US citizen chooses a candidate of a political party. This candidate, if elected, goes to congress. The senate and the US President, both elected by the majority of voters[1], appoint[2] the "chair of the FED". Now this is a DEMOCRATIZED process, although indirect: You don't get to vote directly for the chairman of the FED. There are arguments for and against this process, probably studies on how to make it less prone to corruption and so forth, but ultimately the voter's choice shapes the candidates and their odds. The FED uses inflation or deflation, in order to promote and ensure stability a central power, controlled by the government and indirectly by the people, must have the power create new money on demand (thus create inflation) or deflate the money (thus create deflation) according to what the economy (i.e. the large amount of the population) needs. Enter Bitcoin In bitcoin we have a crypto-currency which offers strong anonymity. There is no central control, so the currency inflates[4] or deflates according to the market. That's all good and well and may even work for a while, but if a strong player enters the market then he can make it go up, down and side-ways as he see fit. So, say you have a player owning as much as 20% of bitcoin. If he cashes out the price goes down. If he cashes the price flies up and so forth. By selling at price A+10 and buying double the amounts at price A-10 he could easily double his amounts by out-playing the market. That's not moral, but legal. Now, in wall street there are authorities against this sort of behavior (they don't act as expected of course, but still you have some sort of control and you have always the government that if decides at some point in time to become more responsible towards tax-payers it can regulate the financial market overnight). According to a paper by none other than Adi Shamir (one of the three founders of the RSA algorithm), 98% of BTC belongs to 2% of portfolios. Hence it's expected from them to act in an immoral self-serving way in the long run. So, did Satoshi democratize the financial system? No, not really. He did the opposite: He create a system which turned the shark totally loose. Of course, the average programmer who doesn't understand much about economics - and we have a huge amount here on HN, more than believed for sure - it seems as if the bitcoin set's him free from the bank but that's not exactly the true. The problem with people vs banks are not the extra fees on money transfers: The problem is people NOT having money to put on the bank. Bitcoin doesn't make you rich. If you are rich you have just one extra toy. If you don't have money, there's no way you could buy bitcoin. Mining? Sure, but minings costs equipment. Only early adopters got an edge and made some money out of the huge price-spike. But this price-spike does promote, hoarding and opportunistic behaviors and in no way promotes democracy. So although the bitcoin protocol is a huge step forward, because adjusts the double spending problem introducing a public ledger, the currency is useful as it has some attributes which you can't find elsewhere (speed, portability, etc.), but it's in no way more democratic or decentralized as many bigots would like to believe. Sorry the long post and any grammar mistakes, it's late here and I'm kinda sleepy. [1] In the US we have small % of population voting. That's an interesting problem: how to get larger part of the population interested in elections? [2] http://en.wikipedia.org/wiki/Chair_of_the_Federal_Reserve#Appointment_process http://en.wikipedia.org/wiki/Chair_of_the_Federal_Reserve#Ap... [3] http://en.wikipedia.org/wiki/Black_Wednesday http://en.wikipedia.org/wiki/Black_Wednesday [4] Bitcoin was not designed to be inflation: It's deflationary on purpose. No one would had any reason to own bitcoin if they were inflationary since you can't pay taxes with BTC.