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Title: Chicago Fed Letter Post by: tbcoin on November 06, 2013, 11:30:05 PM Bitcoin is a digital currency that was launched in 2009, and it has attracted much
attention recently. This article reviews the mechanics of the currency and offers some thoughts on its characteristics. .... http://www.chicagofed.org/webpages/publications/chicago_fed_letter/index.cfm http://www.chicagofed.org/digital_assets/publications/chicago_fed_letter/2013/cfldecember2013_317.pdf Title: Re: Chicago Fed Letter Post by: DeathAndTaxes on November 06, 2013, 11:31:52 PM Wow. Nice find. Bitcoin has come a long way.
Title: Re: Chicago Fed Letter Post by: BTC4Victory on November 07, 2013, 12:32:05 AM Quote Although some of the enthusiasm for bitcoin is driven by a distrust of state-issued currency, it is hard to imagine a world where the main currency is based on an extremely complex code understood by only a few and controlled by even fewer, without accountability, arbitration, or recourse. says the Chicago branch of the Federal Reserve, apparently without any sense of irony whatsoever. ;D Title: Re: Chicago Fed Letter Post by: DeathAndTaxes on November 07, 2013, 12:35:10 AM Quote Although some of the enthusiasm for bitcoin is driven by a distrust of state-issued currency, it is hard to imagine a world where the main currency is based on an extremely complex code understood by only a few and controlled by even fewer, without accountability, arbitration, or recourse. says the Chicago branch of the Federal Reserve, apparently without any sense of irony whatsoever. ;D Yeah only the Fed could be so irony impaired. Mr. Fed chairman where is my option for accountability, arbitration, or recourse from the actions of the Fed? Oh that right if you are a central bank then absolute power is different. "Trust us we know what we are doing". Of course I can inspect the Bitcoin source code (or pay an expert to do so for me). Even if I have a billion dollar I have no ability to inspect the federal reserve's balance sheet or methodology for adjusting the money supply. Still broken irony meter aside the language does show some pretty good understanding of Bitcoin at a conceptual level. Quote When a physical object is exchanged, there is little doubt that the giver owns it and the recipient receives it (whether the object is what it seems to be—and not a counterfeit—has always been a problem for money, but one that is mitigated in a variety of ways). A digital file is easily created and duplicated, so how do we avoid doubts about its authenticity as currency? The solution is basically recursive. Assume that my ownership of the file is ascertained. The bitcoin protocol ensures that the transaction by which I cede ownership of the bitcoin is validated by adding it to a record of all transactions. The recipient’s ownership is now validated. Sorry for the formatting (pdf). This is actually a very good explanation of how the blockchain works for a layman. Never seen it described this way before but it is recursive validation. Quote Bitcoin, however, does not rely on a single recordkeeper. It solves the two challenges of controlling the creation of a unit of digital currency and avoiding its duplication at once. Validation is difficult to do, and those who do it are rewarded for doing so by being allowed to create new bitcoins in a controlled way. A good explanation of why we have miners and why they are compensated. Sadly it is better than 90% of the explanations of this forum which usually are "run a program, solve some puzzles, and get free money" (not as much now given the risen of ASICs but it has provided a horrible perception of how and why mining occurs to non-enthusiasts). Title: Re: Chicago Fed Letter Post by: Carlton Banks on November 07, 2013, 01:42:08 AM Sadly it is better than 90% of the explanations of this forum which usually are "run a program, solve some puzzles, and get free money" Journalists are much the worse offenders. Maybe close to half of Bitcointalkers are ignorant to the details, incentives and overall purposes of mining, but over 90% of journalists show how bad they are at presenting concepts without resorting to crass oversimplifications. Title: Re: Chicago Fed Letter Post by: symaxian on November 07, 2013, 03:13:41 AM Quote Although some of the enthusiasm for bitcoin is driven by a distrust of state-issued currency, it is hard to imagine a world where the main currency is based on an extremely complex code understood by only a few and controlled by even fewer, without accountability, arbitration, or recourse. says the Chicago branch of the Federal Reserve, apparently without any sense of irony whatsoever. ;D Yeah I literally cracked up laughing at that. Somewhere out there in the infinite multiverse there is a universe that has collapsed in on itself due to the inanity of that statement. Title: Re: Chicago Fed Letter Post by: knight22 on November 07, 2013, 04:39:44 AM Quote Should bitcoin become widely accepted, it is un-likely that it will remain free of government intervention, if only because the governance of the bitcoin code and network is opaque and vulnerable. That said, it represents a remarkable conceptual and technical achievement, which may well be used by existing financial institutions (which could issue their own bitcoins) or even by governments themselves So pathetic Title: Re: Chicago Fed Letter Post by: hmmmstrange on November 07, 2013, 06:33:49 AM Something's not right. How can someone at the fed understand bitcoin or even know of Austrian economics and Hayek?
Title: Re: Chicago Fed Letter Post by: marcus_of_augustus on November 07, 2013, 07:28:36 AM Quote Although some of the enthusiasm for bitcoin is driven by a distrust of state-issued currency, it is hard to imagine a world where the main currency is based on an extremely complex code understood by only a few and controlled by even fewer, without accountability, arbitration, or recourse. says the Chicago branch of the Federal Reserve, apparently without any sense of irony whatsoever. ;D Yes ... now how is that "Audit the Fed" bill progressing through Congress? Why do they not want to be audited? Do they not like accountability, transparency, etc? Title: Re: Chicago Fed Letter Post by: marcus_of_augustus on November 07, 2013, 07:32:09 AM Quote Should bitcoin become widely accepted, it is un-likely that it will remain free of government intervention, if only because the governance of the bitcoin code and network is opaque and vulnerable. That said, it represents a remarkable conceptual and technical achievement, which may well be used by existing financial institutions (which could issue their own bitcoins) or even by governments themselves So pathetic Wishful thinking by the Fed lackeys as they watch their pensions sail off into the fiat sunset .... some rorts cannot be extended by bad laws, others can but not forever. Title: Re: Chicago Fed Letter Post by: prophetx on November 07, 2013, 10:30:16 AM Obviously a bit biased but as an economist it was a good read. He must know that Hayek was on to something, and the point about controlling the code and the small base of devs is a weak point and misses the idea of how network control works.
I saw a shorter article on the website of one of the other Fed reserve branches as well, was similar in tone. Title: Re: Chicago Fed Letter Post by: Rygon on November 07, 2013, 09:22:45 PM Quote Should bitcoin become widely accepted, it is un-likely that it will remain free of government intervention, if only because the governance of the bitcoin code and network is opaque and vulnerable. That said, it represents a remarkable conceptual and technical achievement, which may well be used by existing financial institutions (which could issue their own bitcoins) or even by governments themselves So pathetic I'll die laughing the day that the concept of bitcoin becomes so popular that banks start doing gimmicky things like "Bank of America bitcoins" lol. Title: Re: Chicago Fed Letter Post by: prophetx on November 08, 2013, 01:13:35 PM Quote Should bitcoin become widely accepted, it is un-likely that it will remain free of government intervention, if only because the governance of the bitcoin code and network is opaque and vulnerable. That said, it represents a remarkable conceptual and technical achievement, which may well be used by existing financial institutions (which could issue their own bitcoins) or even by governments themselves So pathetic I'll die laughing the day that the concept of bitcoin becomes so popular that banks start doing gimmicky things like "Bank of America bitcoins" lol. yea sure they can use Mastercoin or Color Coin to issue their own BOFA credits on top of the Bitcoin network... i'm sure they will figure it out soon enough (like 10 years ::)) |