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Just the opposite. They can't make sense when applied to the current banking system because the idea is to show that criticism of bitcoin also misses the point.

Just the opposite. They can't make sense when applied to the current banking system because the idea is to show that criticism of bitcoin also misses the point. So the flaws of cash listed in the article are superficially plausible but we know they weren't much of a barrier to wide adoption.

hapless 13y ago
Cash was "adopted" because it is backed by the United States Federal Reserve System. It is legal tender. It is fungible: every checking account is equal. It is issued by regulated institutions, people who sue you are obliged to accept it, and the IRS will take it as payment. This was not always the case. Before the advent of central banking, cash was just as dodgy as Mt. Gox internal transactions. You were unlikely to be able to use cash more than five miles from the bank that issued it. Balance statements were purely arbitrary because you had no insight into your (unregulated) bank's books. In the 19th century, transactions across long distances looked more like hawala than anything the modern man would recognize as banking. This satire was written by someone who does not understand what he or she is attempting to satirize.
- waterlesscloud 13y ago
  Since you're aware of the history of the US central bank, you are also no doubt aware that its invention was the subject of highly contentious debate that lasted decades. It was by no means an easily accepted invention and many, many people ridiculed and mocked it along the way. Perhaps the author understands what they're satirizing a bit more than you're giving them credit for.
  - e12e 13y ago
    There was a lot of (justified IMHO) controversy around the formation of the Euro union as well. I'd say it's a little crazy for one country to have 40+ currencies -- and apparently so did a lot of people -- but it certainly is a tool for independence (which is why I think the Euro was a bad idea and the Dollar was a good idea).
- spuz 13y ago
  The fact that bitcoin is not legal tender is not an argument that the article parodies. Just because there are real arguments against bitcoin does not mean that the others cannot be parodied.
  - hapless 13y ago
    Parodying only the convenient criticisms is an important editorial choice by the author.
- anonymoushn 13y ago
  Being legal tender means a group of thugs who regularly rob me accept this currency but not others. If we must tolerate being regularly robbed by thugs, this is a desirable feature in a currency, but it would be better to not be robbed by thugs at all.
  - hapless 13y ago
    You heard it here, first, folks. A citizen being asked to pay his legal due in taxes is exactly the same as being repeatedly robbed by thugs.
    - krapp 13y ago
      >You heard it here, first, folks. Something something monopoly on violence.
williamcotton 13y ago
Our current systems evolved slowly over the course of thousands of years. They weren't dreamed up one night in some nerd's basement. They were formed over time through public debate and useful exchange of value. Farmers aren't using Bitcoin. Bridge builders aren't using Bitcoin. Armies aren't using Bitcoin. This isn't some situation like where we're choosing between two Ruby libraries that do S3 uploads. This is a situation where we have the institutions that evolved over time vs. some dudes with a new idea on the Internet. Ya'll be ignorant.
- anigbrowl 13y ago
  Quite. Bitcoin has built-in authentication, which is a key feature of a traditional currency, and scarcity as well. But as long as it's not any kind of legal tender, there's no guarantee that any transaction or payment of debt offered in Bitcoin will be accepted, and that introduces considerable friction into its use as a currency. Also, the scarcity is arguably deflationary; nobody goes into solo mining any more because it's obviously not worth it, and the more coins that are mined the lower the incentive to go into mining. This means holding bitcoin results in appreciation proportional to population growth, even though no useful economic activity is taking place when someone sits on top of a pile of cash. The whole point of inflation is to reflect the natural rate of economic growth and to discourage economically inefficient hoarding. Runaway inflation is of course a bad thing, but no inflation at all, or deflation, is just as bad in economic terms.
  - Sheepshow 13y ago
    > even though no useful economic activity is taking place Saving is a useful economic activity. Why should I let some filthy money lender touch my money? It's my money!
  - nunb 13y ago
    >The whole point of inflation is to reflect the natural rate of economic growth and to discourage economically inefficient hoarding. Runaway inflation is of course a bad thing, but no inflation at all, or deflation, is just as bad in economic terms. Consider where that initial cash came from. You worked your ass off between 18 and 60 and you got a bunch of cash in exchange. Some you spent on consumption, some you saved for use later. In fact, cash is just 'tokens for exchange later' where later is a time window that varies from 1 hour (hand-to-mouth) to 50+ years (surplus productive capacity people). Wouldn't it be great if you could use your tokens for their promised exchange-value through your retirement and see those years of hard work payoff? In fact, multiply, because as you said the population grows, more goods are produced, and your cash tokens buy more and more of those goods. It's a great way to retire. Unfortunately for the retired, they are on fixed incomes (pensions) in an inflationary world: those people get SCREWED to the extent where they can't afford heating in some US States. These are people who worked hard all their lives and just wanted to live off the proceeds, the surplus they had generated. Think of the chi^H^H^H grandparents!

hapless 13y ago

Cash was "adopted" because it is backed by the United States Federal Reserve System. It is legal tender. It is fungible: every checking account is equal. It is issued by regulated institutions, people who sue you are obliged to accept it, and the IRS will take it as payment. This was not always the case. Before the advent of central banking, cash was just as dodgy as Mt. Gox internal transactions. You were unlikely to be able to use cash more than five miles from the bank that issued it. Balance statements were purely arbitrary because you had no insight into your (unregulated) bank's books. In the 19th century, transactions across long distances looked more like hawala than anything the modern man would recognize as banking. This satire was written by someone who does not understand what he or she is attempting to satirize.

waterlesscloud 13y ago
Since you're aware of the history of the US central bank, you are also no doubt aware that its invention was the subject of highly contentious debate that lasted decades. It was by no means an easily accepted invention and many, many people ridiculed and mocked it along the way. Perhaps the author understands what they're satirizing a bit more than you're giving them credit for.
- e12e 13y ago
  There was a lot of (justified IMHO) controversy around the formation of the Euro union as well. I'd say it's a little crazy for one country to have 40+ currencies -- and apparently so did a lot of people -- but it certainly is a tool for independence (which is why I think the Euro was a bad idea and the Dollar was a good idea).
spuz 13y ago
The fact that bitcoin is not legal tender is not an argument that the article parodies. Just because there are real arguments against bitcoin does not mean that the others cannot be parodied.
- hapless 13y ago
  Parodying only the convenient criticisms is an important editorial choice by the author.
anonymoushn 13y ago
Being legal tender means a group of thugs who regularly rob me accept this currency but not others. If we must tolerate being regularly robbed by thugs, this is a desirable feature in a currency, but it would be better to not be robbed by thugs at all.
- hapless 13y ago
  You heard it here, first, folks. A citizen being asked to pay his legal due in taxes is exactly the same as being repeatedly robbed by thugs.
  - krapp 13y ago
    >You heard it here, first, folks. Something something monopoly on violence.

williamcotton 13y ago

Our current systems evolved slowly over the course of thousands of years. They weren't dreamed up one night in some nerd's basement. They were formed over time through public debate and useful exchange of value. Farmers aren't using Bitcoin. Bridge builders aren't using Bitcoin. Armies aren't using Bitcoin. This isn't some situation like where we're choosing between two Ruby libraries that do S3 uploads. This is a situation where we have the institutions that evolved over time vs. some dudes with a new idea on the Internet. Ya'll be ignorant.

anigbrowl 13y ago
Quite. Bitcoin has built-in authentication, which is a key feature of a traditional currency, and scarcity as well. But as long as it's not any kind of legal tender, there's no guarantee that any transaction or payment of debt offered in Bitcoin will be accepted, and that introduces considerable friction into its use as a currency. Also, the scarcity is arguably deflationary; nobody goes into solo mining any more because it's obviously not worth it, and the more coins that are mined the lower the incentive to go into mining. This means holding bitcoin results in appreciation proportional to population growth, even though no useful economic activity is taking place when someone sits on top of a pile of cash. The whole point of inflation is to reflect the natural rate of economic growth and to discourage economically inefficient hoarding. Runaway inflation is of course a bad thing, but no inflation at all, or deflation, is just as bad in economic terms.
- Sheepshow 13y ago
  > even though no useful economic activity is taking place Saving is a useful economic activity. Why should I let some filthy money lender touch my money? It's my money!
- nunb 13y ago
  >The whole point of inflation is to reflect the natural rate of economic growth and to discourage economically inefficient hoarding. Runaway inflation is of course a bad thing, but no inflation at all, or deflation, is just as bad in economic terms. Consider where that initial cash came from. You worked your ass off between 18 and 60 and you got a bunch of cash in exchange. Some you spent on consumption, some you saved for use later. In fact, cash is just 'tokens for exchange later' where later is a time window that varies from 1 hour (hand-to-mouth) to 50+ years (surplus productive capacity people). Wouldn't it be great if you could use your tokens for their promised exchange-value through your retirement and see those years of hard work payoff? In fact, multiply, because as you said the population grows, more goods are produced, and your cash tokens buy more and more of those goods. It's a great way to retire. Unfortunately for the retired, they are on fixed incomes (pensions) in an inflationary world: those people get SCREWED to the extent where they can't afford heating in some US States. These are people who worked hard all their lives and just wanted to live off the proceeds, the surplus they had generated. Think of the chi^H^H^H grandparents!