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Author Topic: Economic Totalitarianism  (Read 345641 times)
RealBitcoin
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May 03, 2016, 01:25:30 PM
 #2181

"QE does not inject money to the people."

Correct. Think of it as a pump that drains money from savers
via ultra low interest rates and sprays that money onto selected
banks' balance sheets.

Of course the current QE doesnt inject money, they just inject loans not money.

But under different circumstances, say a massive debt default, they have to print M1 money to prop up the bubbles.

This is how the Weimar Republic collapsed, they devalued their currency to pay the war reparations, then asset bubbles formed where people tried to save their wealth. Then the bubbles collapsed, and the central bank went in to pump them up by printing M1 money and buying them up. Then hyperinflation came.

Its the same pattern.

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May 03, 2016, 02:35:12 PM
 #2182

"QE does not inject money to the people."

Correct. Think of it as a pump that drains money from savers
via ultra low interest rates and sprays that money onto selected
banks' balance sheets.

Of course the current QE doesnt inject money, they just inject loans not money.

But under different circumstances, say a massive debt default, they have to print M1 money to prop up the bubbles.

This is how the Weimar Republic collapsed, they devalued their currency to pay the war reparations, then asset bubbles formed where people tried to save their wealth. Then the bubbles collapsed, and the central bank went in to pump them up by printing M1 money and buying them up. Then hyperinflation came.

Its the same pattern.

Is this similar to Venezuela and Greece?
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May 03, 2016, 03:31:44 PM
 #2183

"QE does not inject money to the people."

Correct. Think of it as a pump that drains money from savers
via ultra low interest rates and sprays that money onto selected
banks' balance sheets.

Of course the current QE doesnt inject money, they just inject loans not money.

But under different circumstances, say a massive debt default, they have to print M1 money to prop up the bubbles.

This is how the Weimar Republic collapsed, they devalued their currency to pay the war reparations, then asset bubbles formed where people tried to save their wealth. Then the bubbles collapsed, and the central bank went in to pump them up by printing M1 money and buying them up. Then hyperinflation came.

Its the same pattern.

Is this similar to Venezuela and Greece?

Greece no, because they use the EUR, they are dependent on the ECB, so they rather just roll out austerity there and cut the costs. The ECB will obviously not sacrifice the entire europe for greece.

But Venezuala is similar, they had a massive asset deflation, especially oil, which makes up their bulk of their economy. The oil market collapsed in the previous months, and they had to print their bolivars to pay their debts as their income shrunk.

They are very indebted and they promised not to default on their bonds, so they just rather print out all their money and directly pay all debts and pump back their assets. This caused hyperinflation once it got out of control, like it always does.

So Venezuela is just another event of the same pattern.

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May 03, 2016, 03:41:49 PM
 #2184

...

Venezuela is in deep doo-doo now.  I have read a couple of stories that they cannot even afford to buy the paper to print their money (and that they are past-due on paying their bills to foreign bank note printers).

Venezuela is the classic modern example of a blow-hard Socialist strong-man government that we had hoped was all gone, all in the past.  Nope!  The people VOTED for Chavez and Maduro (as the Germans did for Hitler).  This is distressing, as it looks like we will never learn, that a majority of people will vote for strong man who promises Free Stuff.

The FSA will have to learn the hard way.  In Venezuela, and later to even the USA.  Americans voted for "Hope & Change" after all.
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May 03, 2016, 04:01:33 PM
Last edit: May 03, 2016, 11:25:06 PM by TPTB_need_war
 #2185

Both Bitcoin and gold have value in that department, but it's difficult for someone to build and guard their own gold vault all day.

Very weak argument. One who can't hide well 100 Kruggerands, is an inept person. Rather the strong points for Bitcoin are:

1. Transportable without confiscation at airports.
2. Electronically spendable and transferable.
3. Effortlessly divisible.
4. No assay needed (cheating is mathematically impossible).

The strong points for gold are:

1. Can't fail.
2. Untraceable.
3. Eternal

Clearly I think crypto-currency is better for most needs, but gold still has some unique use cases, i.e. 1 - 5% of networth as a hedge against apocalypse.



Both Bitcoin and gold have value in that department, but it's difficult for someone to build and guard their own gold vault all day.

Very weak argument. One who can't hide well 100 Kruggerands, is an inept person.

How is that a weak argument?  [...] On the other hand, there's obviously little future for gold due to this scenario.  Almost everyone would place their gold in a 3rd party vault and now it's the same thing as fiat. [...]

You are evaluating gold systemically in terms of whether it is a replacement for fiat. I am pointing out that for the wealthy person, the use case of gold is irrelevant to whether the masses don't adopt gold:

One who can't hide well 100 Kruggerands, is an inept person.

[...]

Clearly I think crypto-currency is better for most needs, but gold still has some unique use cases, i.e. 1 - 5% of networth as a hedge against apocalypse.

The utility of crypto-currency from a personal standpoint is it much more prone to become a top-down controlled fiat and thus lose its permission-less quality.

Gold systemically doesn't solve the fiat problem, but to a wealthy person it is personally it is guaranteed to not be a fiat, as I hold it in my hand and no government can cancel gold as they routinely do for cash[1]. They can erect capital controls, but my gold can remain buried until the government has changed.

In short, gold is more durable than crypto-currency. Whether that is useful to me personally or not, is a matter of personal analysis, perspective, and opinion.

[1]https://www.armstrongeconomics.com/uncategorized/europes-practice-of-cancelling-currency-the-dirty-little-secret-everyone-overlooks/
https://www.armstrongeconomics.com/international-news/north_america/americas-current-economy/the-war-on-cash-2/
https://www.armstrongeconomics.com/writings/2012-2/the-truth-about-gold-why-you-should-buy-it/
https://www.armstrongeconomics.com/uncategorized/says-law/

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May 03, 2016, 04:05:45 PM
 #2186

that a majority of people will vote for strong man who promises Free Stuff.

...

In the video, Vitalik has fallen for the standard technocrat fallacy where he embraces this system of top down control because he fantasizes about himself being part of the controller class.

Vitalik drank the Koolaid that says if good people like him are in control of the technology, then the other 99% can be happy because he is good guy and loves everyone. What he fails to grasp is the Iron Law of Political Economics which says that centralized governance is a power vacuum. That means that whom ever is nice, is pushed aside by those who are more ruthless and can lie better.

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May 04, 2016, 05:26:55 AM
 #2187

Yea, gold is guaranteed to not be fiat, but where do you draw your claim from that it's guaranteed to continue to be a form of money at all?  This is an unknown.  Maybe gold is wothless in the future except for jewlery and anti-corrosive plating and only Bitcoin and a Helium3 backed dollar or something exists.  Then gold loses it's entire network effect derived value and becomes the same thing as current day copper.

Quote
Napoleon III reserved a prized set of aluminum cutlery for special guests at banquets. (Less favored guests used gold knives and forks.)

Well I agree that man has gradually changed what is money to what has superior attributes such as durability, divisibility, transportability. But remember (pure not legal tender) gold's main function has always a hedge against government. Thus my argument is that until crypto-currency can prove it is immune to centralization and centralized control over the internet, then it can't replace gold's function. That is entirely my point.

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May 04, 2016, 10:43:23 PM
 #2188

http://m.wect.com/wect/db_355635/contentdetail.htm?contentguid=XH1Xlo8a 

The average joe is getting fed up with socialism   Cheesy
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May 05, 2016, 06:37:01 AM
Last edit: May 05, 2016, 07:30:48 AM by TPTB_need_war
 #2189

China's centralization of Bitcoin mining:

China's centralization of Bitcoin mining:

Chinese Mining Expands

Guo said the mine, operating 24 hours a day, mines 50 bitcoins all day.

Guo launched the operation two years ago. At that time, mining in China represented about 40% of the world’s mining equipment. China now has 70% of all the equipment, he said.

Guo has established two mines in China and is building another one that, once complete, will be the largest in the world and will produce more than 30% of the entire world’s bitcoin.

he said he mine 50 bitcoin all day, and then if he add another farm he will mine 30%?, somethign wrong with his math, because 30% now are 1200 coins, and after halvign still 600 coin, very far away from 50 with just 2 farm

That really depends if the third one it is actually the largest farm in the world--he never stated that they are the same size.

Well if his claim ends up occurring and his mining farm has a lower cost than the 28.75% of the most marginal miners (and assuming no miners mine unprofitably), then simple algebra says China's share of mining will increase to 98.75% from currently estimated 70%.

Btw, I did that in my head in 30 seconds or less, including reasoning out the impact on mining difficulty. Please check my calculation. (note I assumed 30% share is 1200 coins pre-halving)

Anyone ASIC mining Bitcoin now should sell their ASICs while they still can.

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May 05, 2016, 06:06:13 PM
 #2190

China's centralization of Bitcoin mining:

China's centralization of Bitcoin mining:

Chinese Mining Expands

Guo said the mine, operating 24 hours a day, mines 50 bitcoins all day.

Guo launched the operation two years ago. At that time, mining in China represented about 40% of the world’s mining equipment. China now has 70% of all the equipment, he said.

Guo has established two mines in China and is building another one that, once complete, will be the largest in the world and will produce more than 30% of the entire world’s bitcoin.

he said he mine 50 bitcoin all day, and then if he add another farm he will mine 30%?, somethign wrong with his math, because 30% now are 1200 coins, and after halvign still 600 coin, very far away from 50 with just 2 farm

That really depends if the third one it is actually the largest farm in the world--he never stated that they are the same size.

Well if his claim ends up occurring and his mining farm has a lower cost than the 28.75% of the most marginal miners (and assuming no miners mine unprofitably), then simple algebra says China's share of mining will increase to 98.75% from currently estimated 70%.

Btw, I did that in my head in 30 seconds or less, including reasoning out the impact on mining difficulty. Please check my calculation. (note I assumed 30% share is 1200 coins pre-halving)

Anyone ASIC mining Bitcoin now should sell their ASICs while they still can.

Because POW is flawed.
If Bitcoin was invented with a POS consensus mechanism, we'd all be happy campers. Now there is no choice but to wait for Bitcoin to run itself to the ground in order to let more secure designs take over.

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May 05, 2016, 07:08:36 PM
 #2191

Because POW is flawed.
If Bitcoin was invented with a POS consensus mechanism, we'd all be happy campers. Now there is no choice but to wait for Bitcoin to run itself to the ground in order to let more secure designs take over.

As if POS would not be centralized? With the current % of bitcoin distribution, about 5-10 people would decide the fate of bitcoin. Most likely anonymously.

With the current setup atleast we know who the miners are, the pool operators, while their miners can just quit and join from them, it's much safer.

Because if 1 pool goes rogue, then the miners mining there can just go to another one.



In a POS system, 5-10 anonymous people would have a secret backdoor meeting and would decide whatever they want. That would be horrible.

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May 05, 2016, 08:03:12 PM
Last edit: May 05, 2016, 08:14:31 PM by freshman777
 #2192

Because POW is flawed.
If Bitcoin was invented with a POS consensus mechanism, we'd all be happy campers. Now there is no choice but to wait for Bitcoin to run itself to the ground in order to let more secure designs take over.

As if POS would not be centralized? With the current % of bitcoin distribution, about 5-10 people would decide the fate of bitcoin. Most likely anonymously.

With the current setup atleast we know who the miners are, the pool operators, while their miners can just quit and join from them, it's much safer.

Because if 1 pool goes rogue, then the miners mining there can just go to another one.



In a POS system, 5-10 anonymous people would have a secret backdoor meeting and would decide whatever they want. That would be horrible.

And this is terrible. Tomorrow the chinese government will visit them and tell them "nihao, we cut off your megawatt power lines, we've had enough of your internet play money, game over". An event like that will destroy the bulk of hashrate and effectively kill Bitcoin. The pools are the miners these days, no miners can go nowhere because close to entire mining is now industrial scale, running on industrial scale facilities, fully permissioned by the government while Bitcoin is small. Anonymous POS stakers cannot be shut down this easily. And Bitcoin miners have secret backdoor meetings all the time just the same but you have an external danger with them being dependent on the benevolence of government precisely because they are known.

Just yesterday the chinese government ordered their journalists to make only favorable and good looking economic forecasts and reports, you really believe they'll think twice to shut down the Bitcoin mining farms if Bitcoin somehow gets big and dangerous to their fiat? It would be a kindergarden level of naivete to think so.

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May 05, 2016, 08:47:12 PM
 #2193

you still dont understand that the fundamental difference in bitcoin is that the mining algo can be switched anytime if the miners go rogue.

I've read this argument many times, I am not convinced it will be that easy and effortless to switch the mining algo. Hope you're right.

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May 05, 2016, 09:14:01 PM
 #2194

you still dont understand that the fundamental difference in bitcoin is that the mining algo can be switched anytime if the miners go rogue.

I've read this argument many times, I am not convinced it will be that easy and effortless to switch the mining algo. Hope you're right.

I`m not saying its easy, and i`m not saying it should be done. But as a last resort, there is always an emergency red button available for bitcoin if SHTF.

I hope the bitcoin miners dont screw it up, but if they do , then the current algo has to be switched to an ASIC resistant one, and then all ASICS will become worthless.

Thats a big financial punishment for the miners, and we can hold this leverage against them if they choose to do dirty things.

So fundamentally the bitcoin users and businesses control bitcoin, the miners are only delegates.

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May 06, 2016, 05:46:31 AM
 #2195

Back door in Bitcoin? Click link to find out...

Here is a few morsels of technical kryptonite for the "meme image self-masturbation" trolls[ducks]cock-suckers to gag on:

https://bitcointalk.org/index.php?topic=1459846.msg14766916#msg14766916

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May 06, 2016, 04:26:21 PM
 #2196

Nothing is safe forever, ever.

This is moving along quickly.
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May 06, 2016, 05:16:12 PM
 #2197

Back door in Bitcoin? Click link to find out...

Here is a few morsels of technical kryptonite for the "meme image self-masturbation" trolls[ducks]cock-suckers to gag on:

https://bitcointalk.org/index.php?topic=1459846.msg14766916#msg14766916

Post that on /bitcoin reddit, i would like if other mathematicians would look at it. It could be an interesting finding you got there.

And if what you said there is possible then it could compromize bitcoins security.

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May 06, 2016, 10:44:37 PM
 #2198

Back door in Bitcoin? Click link to find out...

Here is a few morsels of technical kryptonite for the "meme image self-masturbation" trolls[ducks]cock-suckers to gag on:

https://bitcointalk.org/index.php?topic=1459846.msg14766916#msg14766916

Post that on /bitcoin reddit, i would like if other mathematicians would look at it. It could be an interesting finding you got there.

And if what you said there is possible then it could compromize bitcoins security.

Yeah posting it elsewhere where they don't have vested interests may be more productive, the powers that be on bitcoin talk just enjoy fucking with you.
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May 07, 2016, 12:44:14 AM
 #2199

Back door in Bitcoin? Click link to find out...

Here is a few morsels of technical kryptonite for the "meme image self-masturbation" trolls[ducks]cock-suckers to gag on:

https://bitcointalk.org/index.php?topic=1459846.msg14766916#msg14766916

Post that on /bitcoin reddit, i would like if other mathematicians would look at it. It could be an interesting finding you got there.

And if what you said there is possible then it could compromize bitcoins security.

Yeah posting it elsewhere where they don't have vested interests may be more productive, the powers that be on bitcoin talk just enjoy fucking with you.

IDK maybe it was just a misunderstanding, but posting it on reddit so that more people can see it and examine it.

If there is a legitimate problem with bitcoin, people need to know about it.

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May 07, 2016, 12:58:38 AM
 #2200

Back door in Bitcoin? Click link to find out...

Here is a few morsels of technical kryptonite for the "meme image self-masturbation" trolls[ducks]cock-suckers to gag on:

https://bitcointalk.org/index.php?topic=1459846.msg14766916#msg14766916

Post that on /bitcoin reddit, i would like if other mathematicians would look at it. It could be an interesting finding you got there.

And if what you said there is possible then it could compromize bitcoins security.

Yeah posting it elsewhere where they don't have vested interests may be more productive, the powers that be on bitcoin talk just enjoy fucking with you.

IDK maybe it was just a misunderstanding, but posting it on reddit so that more people can see it and examine it.

If there is a legitimate problem with bitcoin, people need to know about it.
I am fairly confident it is a misunderstanding, but it might be a good idea to submit this to the core devs just in case. I am fairly confident that there isn't a backdoor, but it might just be a good idea to show it to them, just in case. Maybe they already know or have a patch for it, but we'll see.

Good find I guess, glad to see someone found something that could be incredibly detrimental.
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