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View Diary: Bitcoin: Don't Mock It. Learn From It. (85 comments)

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  •  Here's the reason I don't really get bitcoin, (6+ / 0-)

    except as a one-time get rich quick method. (I really wish today that I'd gone ahead and put $100 in bitcoin when it became available, but I decided that I'd rather not deal with the IRS, especially with silk road and other systems associated with bitcoin.)

    And even if I did end up with a million dollars in bitcoins a few years on, I'd have a huge problem.

    In order for me to turn those Bitcoins to dollars, I'd need someone willing to buy the bitcoins.

    And that's why all these services seem to have popped up, and why there's this huge industry pushing for people to buy bitcoin. Because the folks who made all this money need to cash out quick before it crashes.

    Not a boat I'd mind being in, especially if I'd bought 100,000 bitcoins a few years ago and then just left them alone. But not the most financially stable boat, either.

    All that being said, the reason the dollar has value is because it is backed by the full faith and credit of the United States, and we have never once defaulted on our debts. Not once. We are the world reserve currency.

    The fact that it's backed not only by the most powerful financial system in the world and the most powerful military the world has ever seen means that the dollar has intrinsic value.

    Now unless you run with the SHTF survivalist crowd, you're not someone likely to think that the US government is just going to collapse.

    So the question is, what backs up bitcoin? What makes Bitcoin intrinsically valuable?

    What makes this different from tulip bulbs or packaged sub-prime debt?

    What makes it more than the latest financial fad?

    An Fhirinn an aghaidh an t'Saoghail. (The truth against the world.) Is treasa tuath na tighearna. (The common people are mightier than the lords.)

    by OllieGarkey on Wed Feb 12, 2014 at 04:32:45 PM PST

    •  Yeah, but here's the thing: (2+ / 0-)
      Recommended by:
      Catesby, genethefiend
      The fact that it's backed not only by the most powerful financial system in the world and the most powerful military the world has ever seen means that the dollar has intrinsic value.
      Many people don't want a "we have the biggest guns and rich bankers lording it over everyone else" type of currency to be the basis of the economic system.

      People who are into alternative currencies want some other basis for making a currency intrinsically valuable.

      Bitcoin supporters want it to be based on the fact that there is no centralized control, so it's like "open-source money." Sort of like how people trust Wikipedia even though there is no central authority writing the articles. It's a libertarian model of trust.

      People like me see flaws in that model too, and instead want a form of democratically accountable central banking.

      What I want to see does not exist, which is why I'm not a big supporter of either the Federal Reserve or bitcoin. But I see tremendous potential in the technology that enables alternative currencies to be created. With that technology, people can invent their own models for how to decide "what is money?" and "who should get the money that gets created?" Some models may succeed and others may fail.

      The bottom line, for me, is that the monetary system we have is a financial oligarchy controlled by wealthy banks, and I don't agree with that. I think people can innovate something better.

      The most serious problem in American politics today is that people with wrong ideas are uncompromising, and people with good ideas are submissive and unwilling to fight. Change that, and we might have a real democracy again.

      by Eric Stetson on Wed Feb 12, 2014 at 04:40:43 PM PST

      [ Parent ]

      •  Wikipedia ... yeah, good example (2+ / 0-)
        Recommended by:
        Chinton, Sparhawk

        Considering you trusted it enough to cite it as a source in an earlier comment, even though it's based on a "Libertarian model of trust" you imply is not trustworthy.

        The problem is not central banks in concept, since you admitted even your "progressive currency" would require some sort of central bank. The problem is "too big to fail" banks, a de-regulated Wall Street and a government corrupted by uncontrolled campaign financing. Those problems can be fixed without trashing the most trusted currency in the world and starting from scratch, especially since you admit there would potentially be a bunch of competing currencies. I see nothing but chaos in that approach.

        I vote we run Rick Scott out of Florida on a high-speed rail.

        by ObamOcala on Wed Feb 12, 2014 at 04:52:07 PM PST

        [ Parent ]

        •  Major political change is one approach. (0+ / 0-)

          But I am not particularly optimistic that the kind of major economic reforms that are needed will come out of the political process in the United States anytime soon.

          I don't knock anyone who tries. I just happen to have come to the view that we also have to be working for progressive change in ways that don't depend on politicians to do the right thing for the people.

          Those who want to work for major economic reform through the political process, my advice is to form some kind of progressive version of the Tea Party, to try to take over the Democratic Party and move it strongly to the left on economic issues. The party we have right now is far, far away from our goals and values -- there's a huge amount of work to be done, even so that economic progressives have a seat at the table of mainstream discourse in Washington.

          As for Wikipedia, I think it proves my point quite well. Most people use Wikipedia all the time, even though it is flawed. Similarly, even bitcoin, a flawed currency, could achieve mainstream use. If even something flawed can enter the mainstream as an important tool -- as Wikipedia has done, and as bitcoin is almost certainly in the process of doing -- then something less flawed could do even better.

          The most serious problem in American politics today is that people with wrong ideas are uncompromising, and people with good ideas are submissive and unwilling to fight. Change that, and we might have a real democracy again.

          by Eric Stetson on Wed Feb 12, 2014 at 05:01:30 PM PST

          [ Parent ]

          •  And that's fine, too: (2+ / 0-)
            Recommended by:
            Eric Stetson, wilderness voice
            I don't knock anyone who tries. I just happen to have come to the view that we also have to be working for progressive change in ways that don't depend on politicians to do the right thing for the people.
            Inherent value, though, is what I want in my currency. So this is something that I don't oppose at all, and I'd definitely support peoples' right to use such currencies as long as

            A) They don't become tax shelters unaccontable to the IRS and allow rich folks to just offshore all their income in currency that cannot be tracked.

            B) They don't lead to the kind of vulture capitalist payday advance/payday loan systems used by evil people and big banks to charge 300% interest.

            C) These currencies aren't used as a medium of exchange for everything from chemical weapons to sex slaves.

            There's ways we can make sure those things don't happen, and most of the activity will have to revolve around making other things illegal, with the possibility of some very light regulations of the cryptocurrency market. Mostly what we need to do is work to end trafficking in sex slaves and illegal weapons, rather than go after the medium of exchange in question.

            We just remember the Whisky rebellion. Mediums of exchange that aren't government currencies are taxable. That's pretty much settled law.

            An Fhirinn an aghaidh an t'Saoghail. (The truth against the world.) Is treasa tuath na tighearna. (The common people are mightier than the lords.)

            by OllieGarkey on Wed Feb 12, 2014 at 05:21:19 PM PST

            [ Parent ]

        •  Nobody's trying to get rich off Wikipedia. (0+ / 0-)

          The hungry judges soon the sentence sign, And wretches hang, that jurymen may dine.

          by magnetics on Wed Feb 12, 2014 at 10:48:36 PM PST

          [ Parent ]

      •  I'll take my chances (14+ / 0-)

        with the US government, with all its assorted troubles, over some server farm in Hong Kong.

        If the pilot's good, see, I mean if he's reeeally sharp, he can barrel that baby in so low... oh you oughta see it sometime. It's a sight. A big plane like a '52... varrrooom! Its jet exhaust... frying chickens in the barnyard!

        by Major Kong on Wed Feb 12, 2014 at 04:54:32 PM PST

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      •  The monetary system is not the issue. (1+ / 0-)
        Recommended by:
        OllieGarkey

        The economy is.

        You can have any monetary system under the sun, but that will not rid your world of wage-slavery, if the multinationals stay in control of manufacturing and trade.

        Yes the economy has replaced industry with finance, but that could be done under any conceivable system of currency.

        The hungry judges soon the sentence sign, And wretches hang, that jurymen may dine.

        by magnetics on Wed Feb 12, 2014 at 10:48:05 PM PST

        [ Parent ]

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