Currency of Yap
Posted on 03/09/2014 7:58:39 AM PDT by Kaslin
Regulators in various countries are grappling with bitcoin. What the hell is it? It's a good question and answers vary widely.
(Excerpt) Read more at finance.townhall.com ...
I suppose an alternate currency could work but I know little about BitCoin. What/who back’s it up?
It’s mainly a way to launder money and buy illegal stuff.
It’s enterprise free from government, willing sellers and willing buyers.
That’s why I like it, even if a few bitcoins get lost now and then.
It’s idiotic. It is no more than cyber-space barter which is not sustainable in the long run and not at all among large groups of people. Therefore, it will primarily be used to launder money and purchase in the black market.
A currancy with no government backing is no currency at all.
When I was a kid, we’d go to the fairs or the ballgames. Almost always, there would be various vendors there who would be advertising, many times having the kids try games,etc for prizes.
Lots of times, the prizes were wooden nickels.
You could use the wooden nickels to buy stuff - but it was totally at the whim of the vendor.
I guess if I were to try to describe what exactly a wooden nickel is, I would have to say it’s none of the above.
It is a token.
And most of the time, the task assigned was collecting the bottles. Beer bottles, coke bottles, pretty much anything of scrap value.
Me and my brother, we hauled in a boatload of bottles!
Bitcoin is nothing.
Running a sophisticated program does not create money.
It is impossible to mine electrons.
It is not money. It is not currency.
The fact that you spent some real money to pretend-acquire some bitcoins does not make them real money.
An entry in an electronic ledger does not necessarily reflect reality.
Wishing for an alternative to the dollar does not make one magically appear.
Wishing for a way to escape taxes does not grant legitimacy to bitcoins.
All of the people saying that Bitcoin (the concept more than the brand) isn’t money are probably right. The question is how it is really any different from fiat money created by a government.
You mean like those worthless Federal Reserve Notes backed in full faith & credit by Uncle Sam?
All trade in money is actually trade in a commodity which has been elevated to the role of money.
The best way to think of money is an a unit of measure. Bitcoin offers a pool of money that is fixed in supply, thus not given to inflation like a government or fractional reserve issued currency.
There is nothing in the protocol that prohibits large groups of people from utilizing it.
Therefore, it will primarily be used to launder money and purchase in the black market.
Most cash is tainted with drug residue, but this doesn't make that the primary use of cash.
A currancy with no government backing is no currency at all.
Governments took control of currencies so they could profit from the debasement thereof (taxation without the hassle of collections).
Currency with no government backing is the only form of currency that can function as a store of value over time.
No, bitcoin is a protocol for facilitating peer to peer transactions with verification managed by a decentralized network of computers maintaining the ledger of accounts.
Running a sophisticated program does not create money.
You're right that there is more to it than that.
It is impossible to mine electrons.
If you think bitcoin requires one to 'mine electrons' you've been grossly misinformed.
It is not money. It is not currency.
It is money, and it is a currency.
The fact that you spent some real money to pretend-acquire some bitcoins does not make them real money.
When you do work or sell good and receive bitcoins, and then trade those bitcoins for goods or work from others, that makes them real money.
An entry in an electronic ledger does not necessarily reflect reality.
This would be news to your bank with regard to your account denominated in USD.
Wishing for an alternative to the dollar does not make one magically appear.
Agreed. But creating a program to maintain a decentralized ledger and verification payment system that allows peer to peer transactions without the need for permission from the government or the existing financial institutions that currently generate over 100 billion dollars annually in fees does make an alternative to the perpetually debased U.S. dollar appear.
Wishing for a way to escape taxes does not grant legitimacy to bitcoins.
Bitcoin doesn't ask for a way to escape taxes. Bitcoin begins with the premise that you and I don't need someone else's permission to trade with one another.
Bitcoin will only be elevated to the role of money in a society if it can perform the functions of money superior to the existing alternatives. How broad the niche for bitcoin is depends on both its utility, and how heavy handed government regulation is of the existing banks that interact with exchanges. It works great for internet exchanges, where waiting 10 minutes or more for solid verification isn't an issue for a good that is being shipped 3-5 days, or even overnight. Transferring money to a relative, or even just accessing your money to pay for a hotel when overseas, are the kind of thing that bitcoin facilitates.
Think of the utility something like bitcoin has if you're in Argentina and the government is trying to enact foreign exchange currency controls so they can inflate the local currency and pay the government's cronies and supporters. Easier to have a bitcoin wallet accessible from anywhere in the world than try to cross a border with a suitcase of dollars or gold.
Hyperinflation doesn't have to hit American shores for an American to benefit from the profligacy of even less soundly run fiat money countries.
Backed by nothing the bitcoin is a US dollar by another name. LOL
An entry in an electronic ledger does not necessarily reflect reality.”””
I think this also applies to Ally Bank.
Only an online entity. No persons to talk to that you can see. No buildings that you can walk into.
A bank created by Obama when he stole the GMAC financing arm of General Motors when he hammered them with an illegal bankruptcy.
I most respectfully reply, "It ain't necessarily so."
Any object valued by another human being becomes a potential currency for trade: cigarettes, food, candy, sex, booze; Name your desire, and put up an object equally valued by your opposite, then voila! You have just made an exchange of currency. And people have exchanged forms of currency long before governments appeared to steal their slices of the pie.
Whatever fuels desire is "golder" than gold, baby. And no government on earth can completely control that flow.
The notion that said objects of currency exchange must have the backing of a government is simply not true. It intimates that it is government, not man, who determines value. And that, my friend, is simply statist bullshit.
have a nice day.
“Currency with no government backing is the only form of currency that can function as a store of value over time.”
Sorry, but that is completely incorrect. Currency has always existed in almost any society that trades goods, even in the absence of government. There are many examples of such currencies, but wampum is the one people commonly know about.
In general, currency is any money that is freely circulated in daily commerce, and in general, useful money must be:
1. durable,
2. divisible,
3. convenient (or portable),
4. stable in value,
5. limited in quantity,
6. universally accepted, and
7. possesses a recognized unit of value.
Nowhere in those criteria is a “central bank” or “government backing” required.
Currency of Yap
Bitcoin is 'backed' by the distributed, decentralized verification network it runs on.
The pool of bitcoins is ultimately fixed by the protocol, unlike the USD which can be printed, in the words of Ben Bernanke, 'willy-nilly'.
Sorry, but that is completely incorrect. Currency has always existed in almost any society that trades goods, even in the absence of government.
We agree, I believe you misread what I wrote.
I can definitely see how, with choices, that currency would quickly fall out of favor. Portability and making change are important factors for money in a society with a high division of labor. Being able to send a million, or one millionth, of a bitcoin around the world in minutes is definitely an advantage of the protocol.
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