bitcoin is backed into a corner at the local prison shower area as bernanke and his friends enter the premises.
Bernanke is a prison thug? Who knew? |
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Gold is the "backing". It is different. Is the difference not obvious?
Bitcoin has an exchange value. It has value based on the value folks give it, what they will exchange for it, but it is not a thing on its own.
Gold is a thing, substantial, with elemental properties. Perhaps the difference is less subtle when you walk away from your computer.
OK then by that rationale, what is the US dollar backed by? Do you think it is a thing, substantial, with elemental properties? The US dollar is a mostly digital currency already today. It is backed by....well....it's simply worth something because the US government says it is. The paper that dollars floating around are made from are worth as much as the value of wiping your ass with them...not much. Likewise, gold has some utility for use in jewelry and sometimes expensive electronics but it's value as a commodity is far less than what it is trading for right now. Yes. the US Federal Reserve Note Dollar is backed by.. US Dollars. (or full faith and credit if you prefer) FRN Dollars is an unbacked fiat currency. Do not mistake the idea of a currency being unbacked with it being valueless. For a bit of history, the US used to have a backed currency, redeemable for gold and silver. When the Federal Reserve was misbegotten, it did the wondrous thing of creating these Federal Reserve Notes that looked almost exactly like the silver and gold backed notes, and they circulated side by side in the biggest con game of the 20th century. The biggest and most substantial difference between Bitcoin and the US Dollar is not the fact that you can hold one in your hand and not the other, it is the fact that one's supply is controlled by a single entity with ultimate power while the other's supply is limited and controlled by no one.
We agree on this. (Though I might swap "ultimate power" with "the claim on the monopoly of the right to kill within its geography" the two are close enough) |
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This is true, Bitcoin as a speculation medium and as a currency don't go together.
People speculate on traditional currencies all the time. It's how Soros made his money. I think you made the Mickey's point for him. Or were you not aware of the effect on those currencies? So yes it can be done. Is it good for "Bitcoin"? |
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....content of what they say is what drives their credibility.
Take Ick, for example; he claims that the world is ruled by shape-shifting reptilian aliens. Do I need to explain why this isn't credible, or why anyone with an ounce of sanity would ignore what he has to say?
You know, since we're all just having fun here and you've told your fair share of untruths, not even trying to place them in a proper form such as reframing of an argument, yes, let's start with the claim that the world is ruled by shape-shifting reptilian aliens. Evidence that that may be so: https://www.youtube.com/watch?v=gDKdHuyQpHYI rest my case.  I think SEC Agent has left us? |
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The definitive answer: Nothing, it is unbacked.
Heh, I'll back it. One ounce of silver for every bitcoin. I have my 21,000,000 ounces here. Redemption on demand. pics?  Pics are in the link in my sig. But, as it happens, since I have been asked to do so, I will be announcing a new silver and gold set designed uniquely to appeal to the Bitcoin community. Many elements of the new piece were suggested by some members here, and along with our expert numismatic designers, we will have a piece (hopefully in time for delivery to retailers before the 5th anniversary of the Satoshi White Paper in Oct). |
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What is gold's value backed by? Utility. Bitcoin is no different. What if everyone stops using bitcoin? Who cares. What if everyone stops using gold?
Gold is the "backing". It is different. Is the difference not obvious? Bitcoin has an exchange value. It has value based on the value folks give it, what they will exchange for it, but it is not a thing on its own. Gold is a thing, substantial, with elemental properties. Perhaps the difference is less subtle when you walk away from your computer. |
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Bitcoin is backed by the number of people who host the blockchain on their PCs at their home, or some other kind of bitcoin software. Ultimately, everyone who has a wallet is a bitcoin backer.
It's a bit like a religion. If many people believe in something, that thing just gets real.
That might be more supported than backed though. http://en.wikipedia.org/wiki/Private_currency#Currency_backing |
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Nicely done counselor! Welcome to the club, we'll make an honest man out of you yet.  |
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Absolutely, because it may be a commodity you need to be careful writing contracts around it. Offering to pay someone 1.1 btc for a 1 btc loan at some future date might be a problem in many states.
CFTC and SEC are federal US, not state. Federal law is mostly silent on small lending. An exception being the Dodd-Frank Wall Street Reform and Consumer Protect Act of 2010 which created the Consumer Financial Protection Bureau, but there's not much to it, mostly it is focused on helping consumers understand credit terms. http://www.consumerfinance.gov/strategic-plan/#overviewState lending rules are a different matter entirely but generally if you are incorporated in a state, you get the rules of that state nationally. Lending a commodity is generally not an issue, unless you are a large bank expecting to be governed by BASEL III and have reserve requirements. |
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If the Winklevoss ETF doesn't come out int the USA, a different one will come out somewhere else eventually. It's inevitable.
There is at least one European-listed ETF effort I'm aware of, which already has a few million USD in the kitty and was looking for additional investors at the London event.
If the USA wishes to keep shooting itself in the foot via excessive regulation of the Bitcoin space, so be it. The rest of the world will take up the slack.
There is already a Bitcoin ETF, from Exante in Malta. The US government has no reason to try to stop the twins. In fact, it provides the US government more avenues of leverage to do what they will, as well as an additional tax base. There is only win for the US gov, no lose here. |
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To sell a BTC requires that you first bought some BTC
Or borrowed it, say, by selling short an ETF... |
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Other than moving speculation out of the blockchain, and maybe some press, there's not much value added.
I hope they make some $$ but since they are adding zero BTC merchants, what does it add to the BTC economy. It isn't even the first Bitcoin ETP/ETF
The value added to Bitcoin from this ETF comes from opening the market to many more potential buyers. But there are no bitcoins for sale, just shares in a bitcoin fund. So there are zero more potential buyers, and zero more potential bitcoin users. Its just tulip trading. Someone has to plant the bulbs and grow the garden or it is just so much nonsense. Quite the opposite. The fund has to be backed by BTC. If it is popular, they will have to acquire more BTC to keep up with demand. Right, tulips. And there is already a bitcoin fund run by Exante that serves the institutional investors. (EUR100K min) Economy is benefited when there is trade. When both sides of a trade get something useful. There's nothing useful here. You see the use being that BTC price might go up? Consider also that central banking can short the ETP and drive the price down with as much fiat as they like. They print the stuff, and it doesn't take much. Up or down either way the Winklevosses will make $ but nothing comes of it for anyone else. Might as well make lottery tickets. It would be better if they were using it for enhancing the marketplace, buying and selling goods and services. |
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No, not really. Commodities are not securities. The regulatory authority is different as well, securities are SEC regulated, commodities (futures contracts) are regulated by CFTC. Commodities are not regulated in this way, just the contracts on them. You can buy wheat, you can buy gold, you can buy the actual stuff. The SEC and CFTC care about the paper, not so much the actual stuff unless it fits the structure of a futures contract. |
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Other than moving speculation out of the blockchain, and maybe some press, there's not much value added.
I hope they make some $$ but since they are adding zero BTC merchants, what does it add to the BTC economy. It isn't even the first Bitcoin ETP/ETF
The value added to Bitcoin from this ETF comes from opening the market to many more potential buyers. But there are no bitcoins for sale, just shares in a bitcoin fund. So there are zero more potential buyers, and zero more potential bitcoin users. Its just tulip trading. Someone has to plant the bulbs and grow the garden or it is just so much nonsense. |
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Other than moving speculation out of the blockchain, and maybe some press, there's not much value added.
I hope they make some $$ but since they are adding zero BTC merchants, what does it add to the BTC economy. It isn't even the first Bitcoin ETP/ETF
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