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Along with, http://yanisvaroufakis.eu/2013/04/22/bitcoin-and-the-dangerous-fantasy-of-apolitical-money/ http://yanisvaroufakis.eu/2013/04/22/bitcoin-and-the-dan

by dataker 11y ago

Along with, http://yanisvaroufakis.eu/2013/04/22/bitcoin-and-the-dangerous-fantasy-of-apolitical-money/ http://yanisvaroufakis.eu/2013/04/22/bitcoin-and-the-dangero... I'd ask him one question: how is the idea of regulated, political and centralized money working out for you?

chimeracoder 11y ago
> I'd ask him one question: how is the idea of regulated, political and centralized money working out for you? That's kind of a straw man, because the Euro is all of the burdens of a centralized fiat currency while lacking almost all of the benefits (or at least the ones most relevant to Greece's current situation). Having a unified monetary policy among countries with incredibly fragmented and disparate fiscal policies is a recipe for disaster. Even in the US, fiscal policies are relatively unified at the federal level and states are prohibited from backing their own debt the way nation-states (like the US federal government and Eurozone countries) can. And on that note, look at the USD. It's the strongest fiat currency in the world and the preferred medium of exchange worldwide, even despite all of the outstanding issues with the US economy and the state of the US national debt. Clearly a centralized, fiat currency can be powerful if you don't set it up for failure from day one (as the Euro was).
- deleted 11y ago
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- deleted 11y ago
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- Nursie 11y ago
  Replying to (I think) undo accidental downvote. Oops
  - cbd1984 11y ago
    As simple matter of showing how the local software works: The comment was gray when I found it and upvoted it, so I don't think replies undo downvotes. The UI of this place is terrible on mobile. Fingers aren't styluses, and nobody (out to three decimal places...) uses a stylus to interact with a mobile phone.
- cbd1984 11y ago
  > even despite all of the outstanding issues with the US economy There's a difference between a temporary setback and problems with the fundamentals. This is the case in the private sector and it is the case with sovereign entities, and the people who keep buying US Bonds obviously understand this. > and the state of the US national debt. Debt is only a problem if you can't service it. This is doubly true with sovereign debt, where servicing debt provides people a safe place to invest their money. None of what I said is controversial among people who understand economies. The fact people whine and moan about the USA's debt is a function of how easy it is to score cheap political points by taking advantage of the ignorant.
  - gnaritas 11y ago
    Well said.
  - chimeracoder 11y ago
    > Debt is only a problem if you can't service it. This is doubly true with sovereign debt, where servicing debt provides people a safe place to invest their money. > None of what I said is controversial among people who understand economies. I have a degree in economics, so yes, I understand how sovereign debt works. The point is that even if the market never loses faith in the US's ability to pay back its existing debt, if it stops being the most trustworthy source of newly-issued debt, the US loses a great deal of power.
    - calibraxis 11y ago
      Interesting notion, the global bully with the big weapons owing you (a nation) a "debt". Which is made by you giving them your money in exchange for IOUs. And you keep rolling it over. Sounds more like tribute.
- pjc50 11y ago
  Indeed. The regulation and centralisation is at the EU level, which isn't really supported by the democratic institutions. There isn't enough solidarity in Europe to make it work. The US is completely different. No matter how bad things get in Detroit, nobody seriously suggests expelling Michigan from the US.
return0 11y ago
If Greece had BTC instead of the euro, he would have again closed the banks and campaign for the blockchain to "forgive the debts of greece before i open them again". The situation with the euro is a lot closer to having BTC than drachma. You chose a bad example to defend BTC.
- zanny 11y ago
  Except you cannot do fractional reserve banking with actual BTC. Fractional reserve works by "saying" people have money in the bank that is not actually there. You could have a fractional reserve BTC bank but then every user could trace every coin they put in it and how it was loaned out, and how much money the bank has at any given time. For better or worse that kind of perfect transparency would mean its impossible to hide a failing bank. Note that some BTC enterprises today like Coinbase actually defer blockchain transactions when users are exchanging in their network. That way they can aggregate small transactions and enable temporary chargebacks. But that really is all a bank can do at most - delay doing the final transactions - because they have to commit them to the global blockchain or you never actually made a transaction.
  - adrianmacneil 11y ago
    Of course you could do fractional reserve lending with BTC (technically at least, legal issues aside). When you deposit coins into an exchange today, the majority of them are sent into cold storage and remain untouched. When you withdraw Bitcoin, you are not getting the exact same coins you deposited. There is nothing technically preventing exchanges from lending out Bitcoin instead of keeping it in cold storage, which would increase the money supply. An analogy would be walking into a bank and handing the teller $100. This money goes into the cash draw (analogous to a hot wallet). When the customer behind you asks to overdraft their account and withdraw $100, your note is handed to them, but your account balance remains at $100. Now you both have $100. Coinbase does not "defer" or "aggregate" transactions between their customers. Most internal transactions are processed "off-blockchain", which simply means that ledger entries are being updated in the background and no actual Bitcoin is being transferred.

by dataker 11y ago

chimeracoder 11y ago

> I'd ask him one question: how is the idea of regulated, political and centralized money working out for you? That's kind of a straw man, because the Euro is all of the burdens of a centralized fiat currency while lacking almost all of the benefits (or at least the ones most relevant to Greece's current situation). Having a unified monetary policy among countries with incredibly fragmented and disparate fiscal policies is a recipe for disaster. Even in the US, fiscal policies are relatively unified at the federal level and states are prohibited from backing their own debt the way nation-states (like the US federal government and Eurozone countries) can. And on that note, look at the USD. It's the strongest fiat currency in the world and the preferred medium of exchange worldwide, even despite all of the outstanding issues with the US economy and the state of the US national debt. Clearly a centralized, fiat currency can be powerful if you don't set it up for failure from day one (as the Euro was).

deleted 11y ago
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deleted 11y ago
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Nursie 11y ago
Replying to (I think) undo accidental downvote. Oops
- cbd1984 11y ago
  As simple matter of showing how the local software works: The comment was gray when I found it and upvoted it, so I don't think replies undo downvotes. The UI of this place is terrible on mobile. Fingers aren't styluses, and nobody (out to three decimal places...) uses a stylus to interact with a mobile phone.
cbd1984 11y ago
> even despite all of the outstanding issues with the US economy There's a difference between a temporary setback and problems with the fundamentals. This is the case in the private sector and it is the case with sovereign entities, and the people who keep buying US Bonds obviously understand this. > and the state of the US national debt. Debt is only a problem if you can't service it. This is doubly true with sovereign debt, where servicing debt provides people a safe place to invest their money. None of what I said is controversial among people who understand economies. The fact people whine and moan about the USA's debt is a function of how easy it is to score cheap political points by taking advantage of the ignorant.
- gnaritas 11y ago
  Well said.
- chimeracoder 11y ago
  > Debt is only a problem if you can't service it. This is doubly true with sovereign debt, where servicing debt provides people a safe place to invest their money. > None of what I said is controversial among people who understand economies. I have a degree in economics, so yes, I understand how sovereign debt works. The point is that even if the market never loses faith in the US's ability to pay back its existing debt, if it stops being the most trustworthy source of newly-issued debt, the US loses a great deal of power.
  - calibraxis 11y ago
    Interesting notion, the global bully with the big weapons owing you (a nation) a "debt". Which is made by you giving them your money in exchange for IOUs. And you keep rolling it over. Sounds more like tribute.
pjc50 11y ago
Indeed. The regulation and centralisation is at the EU level, which isn't really supported by the democratic institutions. There isn't enough solidarity in Europe to make it work. The US is completely different. No matter how bad things get in Detroit, nobody seriously suggests expelling Michigan from the US.

return0 11y ago

If Greece had BTC instead of the euro, he would have again closed the banks and campaign for the blockchain to "forgive the debts of greece before i open them again". The situation with the euro is a lot closer to having BTC than drachma. You chose a bad example to defend BTC.

zanny 11y ago
Except you cannot do fractional reserve banking with actual BTC. Fractional reserve works by "saying" people have money in the bank that is not actually there. You could have a fractional reserve BTC bank but then every user could trace every coin they put in it and how it was loaned out, and how much money the bank has at any given time. For better or worse that kind of perfect transparency would mean its impossible to hide a failing bank. Note that some BTC enterprises today like Coinbase actually defer blockchain transactions when users are exchanging in their network. That way they can aggregate small transactions and enable temporary chargebacks. But that really is all a bank can do at most - delay doing the final transactions - because they have to commit them to the global blockchain or you never actually made a transaction.
- adrianmacneil 11y ago
  Of course you could do fractional reserve lending with BTC (technically at least, legal issues aside). When you deposit coins into an exchange today, the majority of them are sent into cold storage and remain untouched. When you withdraw Bitcoin, you are not getting the exact same coins you deposited. There is nothing technically preventing exchanges from lending out Bitcoin instead of keeping it in cold storage, which would increase the money supply. An analogy would be walking into a bank and handing the teller $100. This money goes into the cash draw (analogous to a hot wallet). When the customer behind you asks to overdraft their account and withdraw $100, your note is handed to them, but your account balance remains at $100. Now you both have $100. Coinbase does not "defer" or "aggregate" transactions between their customers. Most internal transactions are processed "off-blockchain", which simply means that ledger entries are being updated in the background and no actual Bitcoin is being transferred.