XRP is not an IOU. It's a deflationary, math-based currency, just like Bitcoin.
That's a laugh. XRP is NOTHING like Bitcoin. Bitcoin is completely transparent and provable with math. ALL Bitcoin transactions from day 1 are available for viewing and auditing by anyone. That's not true for Ripple. I understand certain people on this forum want to pump Ripple, but please stop trying to hang on Bitcoin's coattails to do it. No need to pump XRP because it's not supposed to be a speculative instrument. You just use it to transfer money |
|
|
|
The best thing that happened to Ripple, was speculators and single-currency thinkers, not rushing to Ripple to "pump" the internal currency, XRP. It's not a speculative currency. I know that's hard for many of you to understand. After all, that's all blockchain coins are good for...speculation. Not knocking it, just saying, I get the limited thinking. Ripple is the value web. It doesn't take an ideological position as to which currencies the world will use and try to jam those down everyones throats. Just as the web doesn't attempt to dictate what type of information is available. Instead, it offers the ability to remove centralized exchanges and central clearing houses, allowing the use of IOU's, you already possess (In those exchanges, bank accounts, Paypal, etc.) and gives you freedom to exchange them for other things of value. As apposed to having your IOU's trapped in those central entities. Think Gox. Total loss for people with IOU's there. With Ripple, those same IOU's Gox is sitting on, could have been exchanged for other things of value, even after they halted withdrawals. Even right now. They're your IOU's after all. Shouldn't you have control over them? Truth is, most of you should avoid Ripple at this point because the raw protocol is really beyond the comprehension of most novice crypto users. Developers will love it. No question about it, but where single currencies are very simple and easy to digest, Ripple is a true monetary system and monetary systems are very complex by nature. Trying to fit Ripple into a "coin" box, will always leave you frustrated, confused and of course, blaming the protocol because it's something you don't understand. Typical way of saving face, I suppose. Nevertheless, hang in there. Whether you get Ripple or not, it's going to change the way the world transacts and that is a good thing for Bitcoin and all things of value. So don't make Ripple the scapegoat or competition to your little currencies. Nope, your currencies are individually responsible for their own success or failure. Ripple is just here to see that there's a way they can reach everybody, where the live, and with what they use locally as currency, without all the middlemen. Welcome to the world of distributed exchange. The future is so bright.  What you're talking about is money. Something that everyone agrees to use to eliminate the double coincidence of wants when trading. Ripple fans never seem to be able to explain to my satisfaction why I'd trade one money, bitcoin, for another money, ripple, just so I can trade that for whatever I really want, recreating the double-concidence-of-wants problem it's supposed to avoid.. Why not just trade bitcoin for what I want? What does adding ripple in the middle of things add to the process? The main thing ripple attempts to accomplish is to create a http://en.wikipedia.org/wiki/Hawala system, where brokers trade IOUs and then at some point settle up after cancelling out IOUs, so they don't need to actually send money back and forth all the time. This is done because it's difficult to transmit traditional money over a long distance or across international borders. However, crypto-currencies don't have this problem. Why do I need a broker to send my money half way across the world when I can just send money half way across the world by clicking my mouse button? That's exactly what he's talking and why Ripple is intriguing. Currently to send money across distances you need a clearing house. You are correct that Hawala does this without a clearing house & Ripple is a digital version of Hawala. The reason why you want this is because people use different local currencies. If my Chinese supplier only accept RMB as payment and if I want to use BTC how can the transfer take place? Either there is a clearing house that takes my BTC and gives him RMB or something like Ripple. |
|
|
|
The best thing that happened to Ripple, was speculators and single-currency thinkers, not rushing to Ripple to "pump" the internal currency, XRP. It's not a speculative currency. I know that's hard for many of you to understand. After all, that's all blockchain coins are good for...speculation. Not knocking it, just saying, I get the limited thinking. Ripple is the value web. It doesn't take an ideological position as to which currencies the world will use and try to jam those down everyones throats. Just as the web doesn't attempt to dictate what type of information is available. Instead, it offers the ability to remove centralized exchanges and central clearing houses, allowing the use of IOU's, you already possess (In those exchanges, bank accounts, Paypal, etc.) and gives you freedom to exchange them for other things of value. As apposed to having your IOU's trapped in those central entities. Think Gox. Total loss for people with IOU's there. With Ripple, those same IOU's Gox is sitting on, could have been exchanged for other things of value, even after they halted withdrawals. Even right now. They're your IOU's after all. Shouldn't you have control over them? Truth is, most of you should avoid Ripple at this point because the raw protocol is really beyond the comprehension of most novice crypto users. Developers will love it. No question about it, but where single currencies are very simple and easy to digest, Ripple is a true monetary system and monetary systems are very complex by nature. Trying to fit Ripple into a "coin" box, will always leave you frustrated, confused and of course, blaming the protocol because it's something you don't understand. Typical way of saving face, I suppose. Nevertheless, hang in there. Whether you get Ripple or not, it's going to change the way the world transacts and that is a good thing for Bitcoin and all things of value. So don't make Ripple the scapegoat or competition to your little currencies. Nope, your currencies are individually responsible for their own success or failure. Ripple is just here to see that there's a way they can reach everybody, where the live, and with what they use locally as currency, without all the middlemen. Welcome to the world of distributed exchange. The future is so bright. +1 good post. Personally I haven't used Ripple but the economics view behind it are correct |
|
|
|
|
A lot businesses make contracts really far in advanced. For example in my industry the contract could be 6 mos to a year in advanced. The current volatility makes BTC not useful.
In my company for example we don't care about fees because were dealing w 100s of thousands of dollars per contract. If you think businesses care about bank fees you are crazy. You should look at our yearly FedEx bill. Its like hundreds of times bigger than our bank fees
|
|
|
|
Oversupply of money is the necessary precondition (which is also the definition of the term "inflation" which I prefer)
Why? How can we make sure that money is not over-supplied? The main principle of modern monetary policy is that economic activity can't be controlled directly. Central banks try to influence it indirectly instead through changing 'the cost of money'. That may or may not be the best approach, but it seems to work well if done properly. But considering senseless QEs it really looks like that central bankers don't have an idea about how their own monetary mechanism works. QE isn't working because Central Bankers can't force banks to lend that money to the private sector. But you already said that in your post. I think the main reason for QE how Bernanke is doing it. He's buying MBSs. He's doing this because banks can't unwind these toxic assets. He's trying to un trap liquidity but the banks just use the money to trade instead of lending to the private sector. If they aren't allowed to prop trade, then perhaps they would lend out the money. The other problem is private sector isn't really borrowing because they don't see a recovery. |
|
|
|
|
BTC is mostly a digital cash. Banking is such a huge industry. Only a small part of it is storing your money.
You can't compare BTC to Paypal. Paypal is a type of clearing house. Paypal is a middleman that takes the risk of the transaction until it clears. Paypal takes a cut of the transaction for providing this service.
I agree w the OP. BTC is superior to cash where cash can't go. Online black markets, etc..
|
|
|
|
|
Thanks for the link. Very interesting article
|
|
|
|
There is only one thing that gives any currency (include fiat) its value, and that is: public acceptance of the currency as means for payment to buy crap. If, for example, Americans all of sudden decided that they will not accept the USD as payment for stuff, then the USD would be worthless.
Therefore, the real question is: how do you convince the population to accept a currency as payment?
You force them to pay their taxes in USD. |
|
|
|
It specifically says on the USD: "This note is legal tender for all debts, public and private." Meaning that the USD is a debt-based currency system. The dollar is inherently worth nothing; exactly like bitcoin. But we believe it to be worth something, just like we believe bitcoin to be worth something. They are no different.
They are no different.A huge difference is that Bitcoin cannot be endlessly inflated by a central power. Correct, they are both fiat and both have zero intrinsic value. The only reason people think "debt is bad" is their point of view is micro (household). In macro, debt is necessary for economic activity People don't like central control because of politics. But almost all of our institutions are centrally controlled (top-down) |
|
|
|
Do you realize this is why we went off gold standard? When you make currency convertible to a commodity. The supply cant keep up w demand. It leads to liquidity crisis
No that was to provide camouflage cover. The real reason we went off the gold standard was to accommodate big government. The US population in 1971 was about 200M and about 300M in 2008 or a 50% increase in 40 years. Take a look at the chart below. Over that same time period 1971-2008 the US monetary base increased about 700% in 40 years. Even worse from 2008-2012 or just 4 years it increased 300%! Liquidity crisis my rear. We're absolutely swimming in dollars. You should really listen to the following Peter Schiff episode. He really nails it talking about average people living on about $50 per week in the 50's yet having a full family, feeding & clothing the kids, without the wife working, and typically without a high school diploma, but it's because in today's dollars a comparable person would need to earn $140K per year. Nixon went off gold standard & left Bretton Woods because there wasn't enough gold reserves to back foreign debt. If foreign debt holders converted their bonds for US gold the USD would have crashed. In fact Switzerland & France started to do this and it began to put pressure on the USD Peter Schiff is a gold peddler and doesn't know squat about economics. The problem we have now is not because there isn't enough USD. The problem is money stuck in the financial world because private sector is deleveraging their balance sheets. |
|
|
|
|
When dealing w money systems, what we care about is liquidity.
Debt isn't good but its ppreferable to crisis
|
|
|
|
why 21mill coins is the same questions as why there are only 171,000 tonnes of gold on the planet. as that equates to less then once ounce of gold per person for the whole planet...world wide wealth exceeds the amount of gold in the world.
Do you realize this is why we went off gold standard? When you make currency convertible to a commodity. The supply cant keep up w demand. It leads to liquidity crisis |
|
|
|
|
My friend works for an HFT. I can tell you its not risk free unless you are sn arbitrageur. What they do is not that different from market making
|
|
|
|
If it's equal value btc vs gold I would take the gold any day of the week. I love btc don't get me wrong but gold has been around for a very, very long time.
Btc has a lot of threats these days. I just like knowing the gold I own is not susceptible to something as crazy as a solar flare. You never know what could happen one day. We're all gonna look really silly one day if there's no electricity but we have our flash drives and paper wallets. Not saying something like that is going to happen but ya never know.
If the shit hits the fan one day I like knowing that my kids and wife have a shot because my safe contains gold and ammo.
Always own some precious metals and gems. Can be like a gold watch, diamond ring or other jewelry. In a war situation it could save your life. Seriously, I experienced this as a kid. |
|
|
|
|
I read that pdf and the only similarities I see between "ideal money" and BTC is a common theme of anti-inflation & anti-central banking. The cool factor of Nash = Satoshi might appeal to "geeks" but it doesn't change the underlying weakness of BTC as currency system. Nash's "ideal money" uses a basket of commodities (CPI) in place of a gold standard, whereas, BTC uses arbitrary and artificial scarcity in the code so it "acts like gold". "Ideal money" is closer to Keynes "bancor" than BTC.
Don't get me wrong. The Nash is genius and I love to study game theory. Still, I'm not convinced that deflation is preferable. I'm a firm believer that money needs elasticity to meet demands of the economic cycles.
Nash spends an entire section talking about savings and why inflation hurts savings. I hear the same argument from bitcoiners all the time. But this rarely reflect reality of most people's lives. Nobody saves money in cash. Most of the middle class own property as their main wealth asset.
Deflation puts long term borrowers at extreme disadvantage. Deflation makes it hard for people to make big purchase like a house, student loan, medical bills.
In any case the macro is more complex than the neoi classical model I'm presenting. At the macro level, deflation can lead to recession and depressions
|
|
|
|
|
I don't think govt wants to detroy crypto currencies. But its their job to regulate these things. One thing for sure, it makes no sense to have more than 1 legal tender. I doubt any crypto w be able to compete w USD or any sovereign fiat in this respect.
What is reasonable and probable is that banks will use the crypto concept to transfer money without a Clearing House. Something like Ripple exceeds BTC in this function.
BTC will still exist for a niche. But so will exist a bunch of alts each fulfilling some other niche. Consumers will continue use sovereign fiats like USD. But it'll be the institutions like big banks that build these services on top of a crypto network. The bitcoin tech dream of digital cash will happen but most likely not using BTC.
The bitcoin Libertarian/ Anarchist dream aint gonna happen simply because people don't choose 'revolution' until life or death urgency. Most want stability and progress/ evolution. Central banks will continue to engage in monetary policies but probably another Bretton Woods type system will come along to address the instabilties of current system.
|
|
|
|
For the best that he doesn't come forward, that air of mystique useful as it implies some hidden influence helping Bitcoin along
Rather lets think about what will happen when the world realizes that it is John Nash. When thinking about the game of the governments vs the people, how might the people expect to lose when they are led by the man that created the game theory that defines the strategy of conflict that the very government uses. Will there be any better way to instill faith in such a currency? Nash is a brilliant mathetician. But why would that news instill faith? |
|
|
|
|
Basically Texas says crypto is not money.
|
|
|
|
|
Funny how libertarians & anarchists want no regulation. Until they observe what happens when there is no regulations.
Moral/ ethical contract is naive. Theres already tons of business laws on the books that address this stuff
1. If do business w a PO box, you're to blame if something goes wrong
2. Law is already like this.
3. There's already bankruptcy laws. Customer deposit is unsecured nonpriority. Little chance to recover. Usually in liquidation only secured creditors get anything.
4. Public corps have to disclose 10Ks and other financials. Private ones don't have to disclose
|
|
|
|
|
Bland discussion. Not many new insights. Chris Brummer, the law professor brought up interesting questions about regulations. But I wished he went more in depth. Jason Healey, the cyber security guy, had some good skepticism grounded in current reality
Ronald Marks, the exCIA. Dont know what his point is? Hes a goldbug? Thinks BTC is 21st Century gold? He wants to get political but doesnt really go there. The miner kid is out of league. Lacks understanding of economics. Don't know why they let him talk so much
They were all very polite. Could have been more aggressive in their arguments.
|
|
|
|
|
Show Posts
