Next generation money

[deisik]

Bitcoin will only be the next generation money if the government will legalize the use of this one. They need to make sure that they were able to track the bitcoins movement to prevent money laundering but if the features of bitcoins does not fix the requirements of the government it would be hard for that to realize.

Yes obviously as bitcoin being totally anonymous it is hard for them to legalize in most of the countries but its up to us We are always anonymous too so no need to fear anything. I am really enjoying this next generation money.

Tell that to Ross Ulbricht, a creator of the DarkNet market known as Silk Road. Are you an undercover FBI agent (which are known to infest this forum), or just a clueless rookie (no offense intended) who needs a cuff on the nape?

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[BobK71]

...
There are a few problems with this approach, though (maybe, even more than just a few, lol). First, the counterparties could just barter. Yes, barter is very inefficient but it allows to effectively solve the next problem inexorably rising under the system of monetary voluntarism. Which is a problem of consensus, i.e. the parties actually don't want to choose what to use as money, since they just want to be sure that what they use as money doesn't cease to be money with the next counterparty which might have different views on what is money and what is not...

Government effectively solves this problem by dismissing monetary voluntarism altogether
...

The problem with 'monetary voluntarism' exists in theory, but in practice the reign of one or two monies (e.g. both gold and silver) have been generally stable over most of history.  If we were to add Bitcoin, it would just add one to a world already used to having more than one money, over the millennia.

Narrowing down the choice to one by government diktat might have slight benefits of efficiency, but is not worth the introduction of the incentives to maximize discretionary issuance.

And let's face it, the real motivation for state money issuance has never been about this efficiency, but the power and wealth the elites can enjoy without doing real work.

[deisik]

...
There are a few problems with this approach, though (maybe, even more than just a few, lol). First, the counterparties could just barter. Yes, barter is very inefficient but it allows to effectively solve the next problem inexorably rising under the system of monetary voluntarism. Which is a problem of consensus, i.e. the parties actually don't want to choose what to use as money, since they just want to be sure that what they use as money doesn't cease to be money with the next counterparty which might have different views on what is money and what is not...

Government effectively solves this problem by dismissing monetary voluntarism altogether
...

The problem with 'monetary voluntarism' exists in theory, but in practice the reign of one or two monies (e.g. both gold and silver) have been generally stable over most of history.  If we were to add Bitcoin, it would just add one to a world already used to having more than one money, over the millennia

The problem is we can't just take and add Bitcoin to the pool of world monies. Let's assume there is no governmental intervention in the process of establishing new money. So how are you going "to add Bitcoin" in practice? What if someone doesn't quite like it and wants "to add", say, Dogecoin (or whatever)?

And right then we are right back to the main problem of monetary voluntarism (i.e. the problem of consensus)

[mrhelpful]

I don't think we can call bitcoins money.. It's neither a currency or a commodity, but it has the qualities of both.

The view of this is flawed automatically, since most already see it can be exchanged for fiat money.

What it really should be viewed is a "money transmitter" which is similar how "travelex" does it with other foreign currencies when youre at a airport converting your countries money.

[Woshib]

The total majority of Bitcoin holders think of their favorite toy as the next step in the evolution of money (less so for active users). I don't deny the technological innovation in respect to the blockchain and the decentralized nature of how new money is created through mining. With that said, I still don't think that Bitcoin did actually revolutionize the concept of money itself. Gold as money existed long before fiat, and it was "created" in a decentralized way too, so nothing particularly new here as well...

I have an idea what could be an entirely new form of money (actually, it is not my idea), but first I would like to hear from you, guys (and gals), what you think about the truly new money that is yet to be invented or implemented

What differentiates the Bitcoin with other existing currencies is that it is virtual, and anyone in the world can buy Bitcoins online, earn, or sell them almost instantly.
The Bitcoin mining is also new.

[BobK71]

The problem is we can't just take and add Bitcoin to the pool of world monies. Let's assume there is no governmental intervention in the process of establishing new money. So how are you going "to add Bitcoin" in practice? What if someone doesn't quite like it and wants "to add", say, Dogecoin (or whatever)?

And right then we are right back to the main problem of monetary voluntarism (i.e. the problem of consensus)

I see the temporary uncertainty (of whether a new money is accepted) as a benefit, not a problem.  If there is no state intervention, each money will have to compete on its merits in the open market.  That those who bet correctly on one money or another will reap the benefits is an incentive for all participants to make careful judgments before they buy into anything.

People who have traveled outside the West know that there is no real need for there to be one money, or even one dominant money, at all times.  Many developing countries have an effective dual currency system, where the local currency is accepted everywhere but dollars are considered more stable but less acceptable, and everyone knows the current exchange rate.  (What keeps this going is the high interest paid by banks for local currency deposits.)  A form of this condition existed in the West under the classical metallic standards period, too.

[deisik]

And let's face it, the real motivation for state money issuance has never been about this efficiency, but the power and wealth the elites can enjoy without doing real work.

If so, then why have they abandoned gold? I don't think the elites can somehow overrule the social laws just like we can't escape the laws of nature. The ultimate irony is that they can't enjoy power and wealth unless some part thereof is bestowed upon the rest of society...

Because their riches come from the riches of society

[deisik]

The problem is we can't just take and add Bitcoin to the pool of world monies. Let's assume there is no governmental intervention in the process of establishing new money. So how are you going "to add Bitcoin" in practice? What if someone doesn't quite like it and wants "to add", say, Dogecoin (or whatever)?

And right then we are right back to the main problem of monetary voluntarism (i.e. the problem of consensus)

I see the temporary uncertainty (of whether a new money is accepted) as a benefit, not a problem.  If there is no state intervention, each money will have to compete on its merits in the open market.  That those who bet correctly on one money or another will reap the benefits is an incentive for all participants to make careful judgments before they buy into anything

So you implicitly assume that the minority should obey what the majority decides since "those who bet correctly on one money [] will reap the benefits", right? Their benefits will necessarily be someone's losses, i.e. losses of those who betted on the wrong horse...

And how is that different from the state enforcing its own idea of money?

[BobK71]

And let's face it, the real motivation for state money issuance has never been about this efficiency, but the power and wealth the elites can enjoy without doing real work.

If so, then why have they abandoned gold? I don't think the elites can somehow overrule the social laws just like we can't escape the laws of nature. The ultimate irony is that they can't enjoy power and wealth unless some part thereof is bestowed upon the rest of society...

Because their riches come from the riches of society

They abandoned gold because they had absolutely no choice.  The various gold standards were designed when they had enough gold to keep the system stable.  But the incentives for the elites to destabilize the system always ended up causing a run on gold by the public and foreign countries.

I'm not sure why you link gold to the motivation of the design.  Perhaps I'm just blanking out...

It's true that the elites, in effect, ally with the rest of society (to different degrees for different groups) by giving them a small share of the spoils.  Real economic activity does pick up as a result of money and other asset issuance.

But the key is that, by distributing the riches (esp. at the very top of the ladder) in an essentially centrally planned manner, the whole economy is distorted towards serving, directly or indirectly, the beneficiaries of the central-authority largesse.  When trust in the asset values eventually crashes (which it does because of the built-in incentives for the elites to keep issuing and hiding bad news,) the bigger beneficiaries cut back spending, and the whole economy suffers.  (A suffering which is not necessary -- we never needed those extra fancy restaurants and chefs in the first place if there had been no state-driven asset inflation.)

In any case, we don't need the elites to give wealth to us by asset inflation -- the Italian Renaissance and Scottish "free banking" era saw spectacular growth without this inflation.

[BobK71]

The problem is we can't just take and add Bitcoin to the pool of world monies. Let's assume there is no governmental intervention in the process of establishing new money. So how are you going "to add Bitcoin" in practice? What if someone doesn't quite like it and wants "to add", say, Dogecoin (or whatever)?

And right then we are right back to the main problem of monetary voluntarism (i.e. the problem of consensus)

I see the temporary uncertainty (of whether a new money is accepted) as a benefit, not a problem.  If there is no state intervention, each money will have to compete on its merits in the open market.  That those who bet correctly on one money or another will reap the benefits is an incentive for all participants to make careful judgments before they buy into anything

So you implicitly assume that the minority should obey what the majority decides since "those who bet correctly on one money [] will reap the benefits", right? Their benefits will necessarily be someone's losses, i.e. losses of those who betted on the wrong horse...

And how is that different from the state enforcing its own idea of money?

The two are not remotely comparable.

[BobK71]

Yes obviously as bitcoin being totally anonymous it is hard for them to legalize in most of the countries but its up to us We are always anonymous too so no need to fear anything. I am really enjoying this next generation money.

Tell that to Ross Ulbricht, a creator of the DarkNet market known as Silk Road. Are you an undercover FBI agent (which are known to infest this forum), or just a clueless rookie (no offense intended) who needs a cuff on the nape?

I think Ulbricht had to make a mistake to be caught.  There's probably a way for these mistakes to be prevented by software.

[OrangeII]

I don't think we can call bitcoins money.. It's neither a currency or a commodity, but it has the qualities of both.

for me it's a bitcoin money. bitcoin can be said transaksiyang tool very quickly and well on the internet, can even be said that bitcoin is the best tool on the internet transactions. I began to think that someday bitcoin will emerge and be recognized in the real world as money

[jiefes]

I don't think we can call bitcoins money.. It's neither a currency or a commodity, but it has the qualities of both.

for me it's a bitcoin money. bitcoin can be said transaksiyang tool very quickly and well on the internet, can even be said that bitcoin is the best tool on the internet transactions. I began to think that someday bitcoin will emerge and be recognized in the real world as money

"Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts in a particular country or socio-economic context,[1][2][3] or is easily converted to such a form. The main functions of money are distinguished as: a medium of exchange; a unit of account; a store of value; and, sometimes, a standard of deferred payment.[4][5] Any item or verifiable record that fulfills these functions can be considered as money." https://en.wikipedia.org/wiki/Money

[deisik]

Yes obviously as bitcoin being totally anonymous it is hard for them to legalize in most of the countries but its up to us We are always anonymous too so no need to fear anything. I am really enjoying this next generation money.

Tell that to Ross Ulbricht, a creator of the DarkNet market known as Silk Road. Are you an undercover FBI agent (which are known to infest this forum), or just a clueless rookie (no offense intended) who needs a cuff on the nape?

I think Ulbricht had to make a mistake to be caught.  There's probably a way for these mistakes to be prevented by software.

To err is human. If I remember correctly, he made a reference to Silk Road on his LinkedIn page, which also contained his personal info. This seems to be the path by which he got finally traced down and holed...

I don't know how you are going to prevent this kind of mistakes by software

[deisik]

The problem is we can't just take and add Bitcoin to the pool of world monies. Let's assume there is no governmental intervention in the process of establishing new money. So how are you going "to add Bitcoin" in practice? What if someone doesn't quite like it and wants "to add", say, Dogecoin (or whatever)?

And right then we are right back to the main problem of monetary voluntarism (i.e. the problem of consensus)

I see the temporary uncertainty (of whether a new money is accepted) as a benefit, not a problem.  If there is no state intervention, each money will have to compete on its merits in the open market.  That those who bet correctly on one money or another will reap the benefits is an incentive for all participants to make careful judgments before they buy into anything

So you implicitly assume that the minority should obey what the majority decides since "those who bet correctly on one money [] will reap the benefits", right? Their benefits will necessarily be someone's losses, i.e. losses of those who betted on the wrong horse...

And how is that different from the state enforcing its own idea of money?

The two are not remotely comparable.

In both of these cases there is coercion in respect to accepting the new money. Surely not something which you would expect from a system which allegedly honors "voluntarism"

[BobK71]

In both of these cases there is coercion in respect to accepting the new money. Surely not something which you would expect from a system which allegedly honors "voluntarism"

I'll quote Joseph Schumpeter here:

"Capitalism [...] is by nature a form or method of economic change and not only never is, but never can be stationary. [...] The fundamental impulse that sets and keeps the capitalist engine in motion comes from the new consumers' goods, the new methods of production or transportation, the new markets, the new forms of industrial organization that capitalist enterprise creates, the same process of industrial mutation—if I may use that biological term—that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism."

There is no coercion in the importation of the potato and corn crops from South America into Europe.  If the government gets involved in dictating we should all eat 50% potatoes (or drives a financial system that inflicts a bias towards new and risky productions -- which amounts to the same thing) that is a different issue altogether.

[deisik]

There is no coercion in the importation of the potato and corn crops from South America into Europe.  If the government gets involved in dictating we should all eat 50% potatoes (or drives a financial system that inflicts a bias towards new and risky productions -- which amounts to the same thing) that is a different issue altogether.

I'm curious if you don't really see the distinction between my and your examples. Governmental diktat in case of potatoes vs corn would mean that we should actually eat 100% potatoes (or 100% pop-corn). The same outcome would be if there is no governmental coercion as to what to eat but the majority (i.e. those who, according to you, "bet correctly" but in fact just make up this majority) still decide that everyone should eat only potatoes (or pop-corn). There is a difference in the ways but not in the result ("ein reich ein volk ein führer"). That's the point I'm trying to make...

As you can see, there is no room for voluntarism in both of these cases

[iv4n]

"You see, money doesn't exist in the 24th Century"

I saw this today, and now while I`m looking what is new on forum I see this thread. Many people talk about future, but what will really come is hard to predict. This is nice video and I think there is sense in this.

https://www.youtube.com/watch?v=TOcKGREiY30

"The acquisition of wealth is no longer the driving force in our lives. We work to better ourselves and the rest of humanity."

[deisik]

And let's face it, the real motivation for state money issuance has never been about this efficiency, but the power and wealth the elites can enjoy without doing real work.

If so, then why have they abandoned gold? I don't think the elites can somehow overrule the social laws just like we can't escape the laws of nature. The ultimate irony is that they can't enjoy power and wealth unless some part thereof is bestowed upon the rest of society...

Because their riches come from the riches of society

They abandoned gold because they had absolutely no choice.  The various gold standards were designed when they had enough gold to keep the system stable.  But the incentives for the elites to destabilize the system always ended up causing a run on gold by the public and foreign countries

Gold had been abandoned when it started to hamper the growth of quickly expanding economies. If you want me to put this way, well, gold had been dropped because the elites saw that it now started to be a hindrance in their pursuit of becoming even more rich and gathering even more wealth. But, as I said, ultimately, you can only be so much rich as the society you belong to...

The wealthiness today is no longer measured by the amount of gold you hide in your backyard or by the amount of cash you stash under the mattress

[BobK71]

There is no coercion in the importation of the potato and corn crops from South America into Europe.  If the government gets involved in dictating we should all eat 50% potatoes (or drives a financial system that inflicts a bias towards new and risky productions -- which amounts to the same thing) that is a different issue altogether.

I'm curious if you don't really see the distinction between my and your examples. Governmental diktat in case of potatoes vs corn would mean that we should actually eat 100% potatoes (or 100% pop-corn). The same outcome would be if there is no governmental coercion as to what to eat but the majority (i.e. those who, according to you, "bet correctly" but in fact just make up this majority) still decide that everyone should eat only potatoes (or pop-corn). There is a difference in the ways but not in the result ("ein reich ein volk ein führer"). That's the point I'm trying to make...

As you can see, there is no room for voluntarism in both of these cases

I may have used a bad example (I was in a hurry,) but my whole point is that money should be treated as just another commodity whose value fluctuates according to supply and demand.  It may be a 'special' commodity in that its value depends on how much you perceive other people want it.  This does increase the uncertainty as to its value, but this is no different from any other financial assets, like stocks, bonds, and real estate.  It doesn't justify state control.

You may have hit upon what some say is money's 'natural monopoly' by your 'voluntarism' argument.  I beg to differ, since both gold and silver having good monetary properties have enabled them to serve peacefully side by side as money (until state intervention created a lot of instability and misery when Britain pushed all major countries to gold in the mid-to-late 19th century -- for the benefit of its own elites, really -- this was the root cause of WJ Bryan's cry of 'crucifying mankind on a cross of gold' during the 1896 election.)

There are tendencies to consolidate monies (the 'network effect' as mentioned above) and this creates uncertainty for some time.  But the best way to deal with this unfortunate side effect is for people to diversify carefully and not bet more than they can afford to lose.  The worst way is to have the elites take control -- that's how you crucify mankind on a cross.