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Indefinitely is a very strong word and goes beyond the initial implications for the (small) population of Wyoming. Under this interpretation of Bitcoin compani

Indefinitely is a very strong word and goes beyond the initial implications for the (small) population of Wyoming. Under this interpretation of Bitcoin companies like Coinbase need to hold the equivalent value of their state holdings in a fiat currency (deriving it's value from government regulation), but fiat currency, aka USD, is no longer on the gold standard (a commodity currency) and thus only holds value because our government tells us it does and our collective agreement that it does hold value. The interpretation of this law would be the equivalent of telling the native americans they need to hold USD reserves to trade in shell money regardless if all people collectively agree that shells hold value as a currency for trade. It's an attempt to continually establish USD being the standard for global currency value. If more states follow suit set by this precedent than companies like Coinbase can't do business and the US Government crushes legitimate bitcoin uses. This requires Bitcoin to continually evolved into an increasingly decentralized currency where both individual humans and computers agree on it's value without the inefficiencies of marketplace or government middlemen.

Frondo 11y ago
"... thus only holds value because ... our collective agreement that it does hold value." What exactly do you think the value of a given collection of bits is?
- x3n0ph3n3 11y ago
  As much as people agree, just like every other currency.
- startupfounder 11y ago
  The value of a given collection of bits is whatever you and I agree the value of those collection of bits is. It's a one to one relationship. The value of USD is not what you and I agree the value is, it's what the government tells us what the value should be. This is not a one to one relationship. One is based on a transparent mathematical equation between you and I and the other is based on 7 non-elected and appointed board of governors between you and I. That's the difference.
  - sanswork 11y ago
    How does the US government dictate how much value you assign to the USD? You could trade me a piece of gum for $1 or a car for $1. In both cases you've agreed with me on the value of $1 and in both cases that value is different. You have no more control over the market price of Bitcoin than you do the forex pricing for USD.
davidgerard 11y ago
>and thus only holds value because our government tells us it does and our collective agreement that it does hold value. As opposed to Bitcoins, because ... ?
exelius 11y ago
The whole "Bitcoin as magical Internet money with no restrictions" thing? Not going to happen. We have banking laws for a reason: people need to trust that the money they entrust to others will be there when they want it back. It's not good enough to rely on the honor system, because to someone who has lost their money it doesn't matter if it was through fraud or negligence. So governments ensure that businesses dealing directly in money at least have enough money to allow their customers to cash out. But I am curious about the interpretation. The IRS considers Bitcoin to be an asset like any other. I personally don't consider Bitcoin to be a currency: by far its strongest use case is as a digital store of value that can be exchanged for a real currency. It's closer to a digital equivalent of gold in that regard. But regardless of the classification of Bitcoin, this is not an insanely stupid move. Money transmission companies can be notoriously shady, and you don't want a situation where you give them money to transfer and it never arrives because they spent that money on hookers and booze. Coinbase isn't in that category, but if wire transfer companies catch on that they can use Bitcoin to evade the holdings laws. Some of them will be shady.
- startupfounder 11y ago
  > We have banking laws for a reason: people need to trust that the money they entrust to others will be there when they want it back. If we trust the system that pulls the wool over our eyes, should we really trust it? Have a listen to TAL: http://www.thisamericanlife.org/radio-archives/episode/536/the-secret-recordings-of-carmen-segarra http://www.thisamericanlife.org/radio-archives/episode/536/t... The problem with the creation of law in the USA is that it unequally favors those who can pay to finance elected officials campaigns and thus non-elected governing bodies. A transparent financial blockchain is the core difference in philosophy between backroom decisions made on our behalf supposedly with our best intentions in mind by non-elected appointed people and a mathematical equation that we can all see and test. Math we can all trust because it is true at it's core, can we do the same for people? Yes some payment processors can be shady, but so can some fed officials who are incharge with our entire financial system.
  - srdev 11y ago
    > If we trust the system that pulls the wool over our eyes, should we really trust it? Blanket statements don't really help to determine if a given set of regulation is useful or not. The system has a lot of bad parts and regulatory capture is a thing, but that does not imply that literally all regulation is poor and need to be ignored. If one wants to make a statement with regards to any set of regulation, it needs to be specific and fact-based; simply issuing blanket statements is useless at best and dishonest at worst. > A transparent financial blockchain is the core difference in philosophy between backroom decisions made on our behalf supposedly with our best intentions in mind by non-elected appointed people and a mathematical equation that we can all see and test. Math we can all trust because it is true at it's core, can we do the same for people? This is pretty much nonsense. The statements you are making here are so abstract and broad that they defy any sort of reasonable analysis. You can consider the Bitcoin algorithm as a mathmatical equation, but that says nothing about whether you can trust the individual entities utilizing Bitcoin. You can't reduce all interactions between people to algorithms, so at some point you're going to have to have rules and norms in place, which will ultimately be decided on by people in some manner. Furthermore, whether the system is encoded as an algorithm (what you're calling math here) is orthogonal to whether it is doing the correct or optimal thing. The "trust in math" line espoused by Bitcoin advocates does not have the effect they think; it simply makes them appear dogmatic and cultish. Saying that something is math and therefor trustable and unassailable is rather short-sighted. > Yes some payment processors can be shady, but so can some fed officials who are incharge with our entire financial system. The existence of shady fed officials has no bearing whatsoever on whether a specific set of rules are good or necessary from a societal standpoint. Its a completely separate discussion. On the other hand, the fact that some payment processors are shady is relevant to the discussion of whether the rules are necessary. Ultimately, your entire argument is an emotional appeal here. You'd do better to set aside the rhetoric.

Frondo 11y ago

"... thus only holds value because ... our collective agreement that it does hold value." What exactly do you think the value of a given collection of bits is?

x3n0ph3n3 11y ago
As much as people agree, just like every other currency.
startupfounder 11y ago
The value of a given collection of bits is whatever you and I agree the value of those collection of bits is. It's a one to one relationship. The value of USD is not what you and I agree the value is, it's what the government tells us what the value should be. This is not a one to one relationship. One is based on a transparent mathematical equation between you and I and the other is based on 7 non-elected and appointed board of governors between you and I. That's the difference.
- sanswork 11y ago
  How does the US government dictate how much value you assign to the USD? You could trade me a piece of gum for $1 or a car for $1. In both cases you've agreed with me on the value of $1 and in both cases that value is different. You have no more control over the market price of Bitcoin than you do the forex pricing for USD.

davidgerard 11y ago

>and thus only holds value because our government tells us it does and our collective agreement that it does hold value. As opposed to Bitcoins, because ... ?

exelius 11y ago

The whole "Bitcoin as magical Internet money with no restrictions" thing? Not going to happen. We have banking laws for a reason: people need to trust that the money they entrust to others will be there when they want it back. It's not good enough to rely on the honor system, because to someone who has lost their money it doesn't matter if it was through fraud or negligence. So governments ensure that businesses dealing directly in money at least have enough money to allow their customers to cash out. But I am curious about the interpretation. The IRS considers Bitcoin to be an asset like any other. I personally don't consider Bitcoin to be a currency: by far its strongest use case is as a digital store of value that can be exchanged for a real currency. It's closer to a digital equivalent of gold in that regard. But regardless of the classification of Bitcoin, this is not an insanely stupid move. Money transmission companies can be notoriously shady, and you don't want a situation where you give them money to transfer and it never arrives because they spent that money on hookers and booze. Coinbase isn't in that category, but if wire transfer companies catch on that they can use Bitcoin to evade the holdings laws. Some of them will be shady.

startupfounder 11y ago
> We have banking laws for a reason: people need to trust that the money they entrust to others will be there when they want it back. If we trust the system that pulls the wool over our eyes, should we really trust it? Have a listen to TAL: http://www.thisamericanlife.org/radio-archives/episode/536/the-secret-recordings-of-carmen-segarra http://www.thisamericanlife.org/radio-archives/episode/536/t... The problem with the creation of law in the USA is that it unequally favors those who can pay to finance elected officials campaigns and thus non-elected governing bodies. A transparent financial blockchain is the core difference in philosophy between backroom decisions made on our behalf supposedly with our best intentions in mind by non-elected appointed people and a mathematical equation that we can all see and test. Math we can all trust because it is true at it's core, can we do the same for people? Yes some payment processors can be shady, but so can some fed officials who are incharge with our entire financial system.
- srdev 11y ago
  > If we trust the system that pulls the wool over our eyes, should we really trust it? Blanket statements don't really help to determine if a given set of regulation is useful or not. The system has a lot of bad parts and regulatory capture is a thing, but that does not imply that literally all regulation is poor and need to be ignored. If one wants to make a statement with regards to any set of regulation, it needs to be specific and fact-based; simply issuing blanket statements is useless at best and dishonest at worst. > A transparent financial blockchain is the core difference in philosophy between backroom decisions made on our behalf supposedly with our best intentions in mind by non-elected appointed people and a mathematical equation that we can all see and test. Math we can all trust because it is true at it's core, can we do the same for people? This is pretty much nonsense. The statements you are making here are so abstract and broad that they defy any sort of reasonable analysis. You can consider the Bitcoin algorithm as a mathmatical equation, but that says nothing about whether you can trust the individual entities utilizing Bitcoin. You can't reduce all interactions between people to algorithms, so at some point you're going to have to have rules and norms in place, which will ultimately be decided on by people in some manner. Furthermore, whether the system is encoded as an algorithm (what you're calling math here) is orthogonal to whether it is doing the correct or optimal thing. The "trust in math" line espoused by Bitcoin advocates does not have the effect they think; it simply makes them appear dogmatic and cultish. Saying that something is math and therefor trustable and unassailable is rather short-sighted. > Yes some payment processors can be shady, but so can some fed officials who are incharge with our entire financial system. The existence of shady fed officials has no bearing whatsoever on whether a specific set of rules are good or necessary from a societal standpoint. Its a completely separate discussion. On the other hand, the fact that some payment processors are shady is relevant to the discussion of whether the rules are necessary. Ultimately, your entire argument is an emotional appeal here. You'd do better to set aside the rhetoric.