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mindtomatter (OP)
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March 31, 2013, 08:01:12 PM |
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The problem with the strategy suggested by the OP is that the initial buying of Bitcoin will increase the price which will increase the awareness for Bitcoin.
That is what they *do not* want to happen. They want people to think Fiat currency is the only kind of money possible.
It does not matter if Bitcoin itself is successful or not, once enough people understand the concept of a decentralized cryptocurrency and its advantages, then all is lost for the central bankers. Alternatives cryptocurrencies can appear and take the place of Bitcoin if necessary.
So what the actually are hoping for is that awareness and understanding of Bitcoin stays as low as possible. They are two ways to acheive this, no information or misinformation on Bitcoin.
Both have been attempted, obviously the "no information"-tactic is working less and less.
Hey, I understand it's a long thread but I've gone over this at least 4 times in previous answers: it is BETTER if the price increases because it will PULL IN MORE NEW USERS who don't want to miss out on the speculative gains to be made. Then when I dump all my accumulated bitcoins, the biggest buyer goes to the largest supplier, and walks away from the table with all the money people buy back bitcoins with. This would cause MAJOR depression in bitcoin because a) all the liquidity provided initially would be completely removed - People just assume it all stays in the same pool, but if I were a CB I would want to make things as painful as possible and that's the way to do it. Create false demand that people get used to, then dump it all to create a HUGE oversupply, which makes all the coins plummet in value as people struggle to sell before it goes to zero. There will be winners in this scenario, people who buy when the price is low and they will get wealthy - But I don't care about that. I care about the majority of average, every day people being TERRIFIED of bitcoin and any other cryptocurrency because the last time they invested and thought it was going up forever they lost a large amount of their investment. People don't forget losing money, especially when they don't understand why the market moves like it does. Those people who get burned bad enough will stay away, which is why I win. As to people finding out about Bitcoin, the fed has zero control over that. Can't spend money and stop people from figuring out Bitcoin is worthwhile, and since it's fundamentals make it look so good in this time when other money is so bad, how do you stop the awareness? That's why the only way to do it is seemingly ignore the issue, then when things inevitably go haywire you caution people against investing in unsafe and volitile assets, why not just put your money in the good ol' dollar? is the inferrence. |
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mindtomatter (OP)
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March 31, 2013, 08:06:52 PM |
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Sorry for arriving late to this thread... but I think your plan is silly.
Why not simply allocate some small percentage of fiat and use it to buy and hold bitcoin... throw enough money at it, drastically deflate it...
Say central banks now own 90% of btc.
How much of what's left is horded? How much is actively being traded?
By forcing a massive bubble over a long enough period of time you might actually slow down the growth of the bitcoin economy. Since the supply is fixed - eventually it gets to a breaking point - where you have to start selling some of your holdings (for insane profits I might add) or stagnate the economy.
So if we give the bankers a choice between making an insane profit over a period of 30 years or consuming their investment to kill competition... which are they more likely to choose?
~
Also, this isn't about "real market value" in the same way a commodity is. . . bitcoin isn't a basket of goods. Even bubbles that exist for long enough will persist after you 'pop the bubble'. It's all about how people perceive the value - so there's no inherent value to a bitcoin.
Your argument would make more sense if bitcoin wasn't infinitely devisable, if 90% of the bitcoins were owned by one shadowy entity unbeknownst to the rest of the market then the remaining whatever% in circulation would be exceptionally valuable, and the amounts being traded for commerce would be .000000xwhatever bitcoin. There are already plans to move the decimal point once the value gets high enough to justify it. 21 million coins becomes 210 million or 2,100 million or whatever and the 0.1 becomes 1.0 becomes 10.0. I think by forcing a massive bubble over a long enough period of time would encourage EVERYONE to get into bitcoin, you need volatility to scare people out otherwise it's stupid to keep your money in anything BUT this perpetually rising currency, that works against my purposes. And your assumption that bankers care about profit should be dispelled by the last 5 years of world events - Bankers want to stay at the top, the gatekeepers of finance, able to make and break companies like pieces in a game of chess. Making profits is secondary to that. I still have yet to see why my arguement is "silly" perhaps you can explain instead of just insulting? |
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MatTheCat
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March 31, 2013, 09:05:11 PM |
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My problem with your argument is that once Money stops being important to you because you have so much, Power is all that remains.
The power of a central bank is to control the issuance and the interest rates of that money, so anything that threatens that control cannot be allowed. In this scenario, bitcoin is cutting in on a zero sum game - People conducting transactions or keeping their savings in Bitcoin of course do NOT keep that same value in another currency. In our current monetary reality, virtually every transaction in one way or another is enabled by the US dollar. Most currencies around the world use the US dollar, and US treasury debt as the backing of their own currency.
Also lets keep in mind those "old ideas" were abandoned to remove the controls they put on the Central Bank. It used to be they weren't allowed (but did it anyhow) to create more money than they could back with gold and silver. That was inconvenient because what if they really wanted to print more money but didn't have more gold? It needed to be removed so the "proper" actions could be taken.
Bitcoin is like that, except when they want to "do it anyhow", they have to actually tell people their plan, explain the reasoning, and then hope enough participants will think it's a good idea and adopt it as their own. Compare that to the system now where 12 unelected bankers sit around a table making arbitrary decisions that further their personal goals? It wasn't until very recently that normal citizens even got to know what was said at these meetings, and now it's with a FOUR YEAR LAG.
If I were a central banker, I would be terrified of two things: Sunlight and Bitcoin
WH WH WHAT WHAT WHAT!? How dare you suggest that Bitcoins are being manipulated. They are not being manipulated! The recent market action is all down to the people beginning to realise that they need to flee to a safe haven away from the dollar. You obviously don't understand anything about Bitcoins. To suggest that central bankers care about Bitcoin is a form of insanity! If anything, they will actually be glad that there is something that can help them fix the world and make lots of money at the same time. I am going to tell my granny to put all her life savings into Bitcoins. I feel it is my moral duty to do so! Undermine my paradigm would you? Well, I will tell you, my paradigms are my castles, and I don't take kindly to those who attack my castles! You are mad! You are an idiot! Everything you say is total rubbish! etc etc etc. Ahem, sorry bout that, but I do have an overwhelming instinct to adjust my posturing in accordance with whatever tune the mob happen to be playing. The fact that the mob and their group-think are nearly always wrong on most matters doesn't put me off one little bit. In seriousness, although you may or may not be entirely accurate in terms of details, going by the way you have ruffled so many members of the Bitcoin communities feathers, and having them reveal their seriously faulty ideas about how the world works by waving them in your face, I suspect that your guesstimations will at least in spirit, be highy accurate. The only counter to your arguments that I have find to contain any substance, is the idea that a much cheaper and more certain method of taking down Bitcoin, would be too simply invest in a megafarm, build up a huge hoard of Bitcoins, then dump on the market on a down day one day. With the real underlying economic activity representing a mere fraction of the total Bitcoin trade volume, the ensuing rush to sell in order to minimise losses and/or maximise profits would take this eagle down. |
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mindtomatter (OP)
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March 31, 2013, 09:28:57 PM |
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My problem with your argument is that once Money stops being important to you because you have so much, Power is all that remains.
The power of a central bank is to control the issuance and the interest rates of that money, so anything that threatens that control cannot be allowed. In this scenario, bitcoin is cutting in on a zero sum game - People conducting transactions or keeping their savings in Bitcoin of course do NOT keep that same value in another currency. In our current monetary reality, virtually every transaction in one way or another is enabled by the US dollar. Most currencies around the world use the US dollar, and US treasury debt as the backing of their own currency.
Also lets keep in mind those "old ideas" were abandoned to remove the controls they put on the Central Bank. It used to be they weren't allowed (but did it anyhow) to create more money than they could back with gold and silver. That was inconvenient because what if they really wanted to print more money but didn't have more gold? It needed to be removed so the "proper" actions could be taken.
Bitcoin is like that, except when they want to "do it anyhow", they have to actually tell people their plan, explain the reasoning, and then hope enough participants will think it's a good idea and adopt it as their own. Compare that to the system now where 12 unelected bankers sit around a table making arbitrary decisions that further their personal goals? It wasn't until very recently that normal citizens even got to know what was said at these meetings, and now it's with a FOUR YEAR LAG.
If I were a central banker, I would be terrified of two things: Sunlight and Bitcoin
WH WH WHAT WHAT WHAT!? How dare you suggest that Bitcoins are being manipulated. They are not being manipulated! The recent market action is all down to the people beginning to realise that they need to flee to a safe haven away from the dollar. You obviously don't understand anything about Bitcoins. To suggest that central bankers care about Bitcoin is a form of insanity! If anything, they will actually be glad that there is something that can help them fix the world and make lots of money at the same time. I am going to tell my granny to put all her life savings into Bitcoins. I feel it is my moral duty to do so! Undermine my paradigm would you? Well, I will tell you, my paradigms are my castles, and I don't take kindly to those who attack my castles! You are mad! You are an idiot! Everything you say is total rubbish! etc etc etc. Ahem, sorry bout that, but I do have an overwhelming instinct to adjust my posturing in accordance with whatever tune the mob happen to be playing. The fact that the mob and their group-think are nearly always wrong on most matters doesn't put me off one little bit. In seriousness, although you may or may not be entirely accurate in terms of details, going by the way you have ruffled so many members of the Bitcoin communities feathers, and having them reveal their seriously faulty ideas about how the world works by waving them in your face, I suspect that your guesstimations will at least in spirit, be highy accurate. The only counter to your arguments that I have find to contain any substance, is the idea that a much cheaper and more certain method of taking down Bitcoin, would be too simply invest in a megafarm, build up a huge hoard of Bitcoins, then dump on the market on a down day one day. With the real underlying economic activity representing a mere fraction of the total Bitcoin trade volume, the ensuing rush to sell in order to minimise losses and/or maximise profits would take this eagle down.  |
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MatTheCat
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March 31, 2013, 10:39:25 PM |
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That was my way of saying that I have enjoyed your posts and pretty much agree in spirit with what you have said. Since I couldnt post on the main forum until just now, I have spurted out all I have to say on the matter in the n00b forum. So other than repeating myself all over again, I thought I would just type something mental. |
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mindtomatter (OP)
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March 31, 2013, 11:11:56 PM |
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That was my way of saying that I have enjoyed your posts and pretty much agree in spirit with what you have said. Since I couldnt post on the main forum until just now, I have spurted out all I have to say on the matter in the n00b forum. So other than repeating myself all over again, I thought I would just type something mental. I enjoyed it quite a bit, almost as good as a tip  13yRVRmVwiShRHBfmEFEd5zv9zhKGFUXRg |
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MikeH
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April 01, 2013, 03:53:41 AM |
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mindtomatter (OP)
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April 01, 2013, 04:10:20 AM |
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Silver and Gold markets are easy to manipulate because paper promises outweigh the actual stuff by about 100x. People only use paper gold and silver because there are real expenses associated with the trading and transport of the real physical object.
This is not the case with bitcoin, there is no advantage at all to using an instrument to represent a bitcoin because a bitcoin is already just about as easy to transact as whatever you'd be replacing it with. Using derivatives to buy bitcoin makes no sense at all
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sgbett
Legendary
 Offline
Activity: 2576
Merit: 1087
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April 01, 2013, 10:26:44 AM |
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I'm just thinking out loud here. I wonder what percentage of the worlds wealth do the central banks currently own? If you can own a bigger percentage of the total number of bitcoins (through infinite buying now, and massive investment in mining so you control the vast majority of hashing power... you collect the majority of mining rewards and ultimately end up being the cheif beneficiary of anyone using the system through transaction fees) I doubt the fed is stupid, so they know the dollar has a limited shelf life, taking all their soon to be worthless dollars and switching them for bitcoin now isn't such a daft idea... In the BTC deflationary endgame. The more you own, the more you benefit from deflation? The more hashing power you own, the more of the transaction fees are headed your way. Effectively you'd be getting richer faster than everyone else... just like the good old dollar days  What if Satashi Nakamoto is the US govt?  |
"A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution" - Satoshi Nakamoto*my posts are not investment advice*
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abbyd
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April 01, 2013, 12:01:10 PM |
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Sorry to say it, but I am with OP here. Points:
* central banks DON'T CARE ABOUT LOSING MONEY.
All central banks do is PRINT MONEY, and right now this is done electronically.
It costs them almost nothing to create more money, and they can do it almost instantly.
The US Fed has intentionally bought TRILLIONS of "bad debt" from financial corporations
to offload losses. Throwing 1 billion into BTC would be a drop in the bucket.
* Central banks DO worry about any competitor to their fiat system, no matter how small.
The IMF constantly worries about bartering and the black market. The global financial
system works by keeping labor going to pay interest on infinite debt. Anyone exiting
their debt-based financial system is a threat to their dominance.
* Right now, the top level international financial networks are STRIKINGLY SIMILAR TO BITCOIN
All transactions are done electronically, and happen very quickly. Also, the parties often don't pay taxes because
funds are laundered offshore. I doubt that hedge funds and HFT traders are happy that Linux dorks now
have a rival system, that is even decentralized!
* Buying up bitcoins and running the price up over $100 can be harmful to the burgeoning economy.
"Everyone has a price" - those who won't sell at $100, will start thinking hard at $1000, etc.
Central banks don't even need to sell the BTC after blowing the bubble. Taking 40% of bitcoins out of
circulation would do damage to the bitcoin economy. They could also just create a "liquidity trap"
which results from deflation (put simply: everyone is hoarding coins so the economy stagnates).
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mindtomatter (OP)
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April 01, 2013, 06:23:31 PM |
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Sorry to say it, but I am with OP here. Points:
* central banks DON'T CARE ABOUT LOSING MONEY.
All central banks do is PRINT MONEY, and right now this is done electronically.
It costs them almost nothing to create more money, and they can do it almost instantly.
The US Fed has intentionally bought TRILLIONS of "bad debt" from financial corporations
to offload losses. Throwing 1 billion into BTC would be a drop in the bucket.
* Central banks DO worry about any competitor to their fiat system, no matter how small.
The IMF constantly worries about bartering and the black market. The global financial
system works by keeping labor going to pay interest on infinite debt. Anyone exiting
their debt-based financial system is a threat to their dominance.
* Right now, the top level international financial networks are STRIKINGLY SIMILAR TO BITCOIN
All transactions are done electronically, and happen very quickly. Also, the parties often don't pay taxes because
funds are laundered offshore. I doubt that hedge funds and HFT traders are happy that Linux dorks now
have a rival system, that is even decentralized!
* Buying up bitcoins and running the price up over $100 can be harmful to the burgeoning economy.
"Everyone has a price" - those who won't sell at $100, will start thinking hard at $1000, etc.
Central banks don't even need to sell the BTC after blowing the bubble. Taking 40% of bitcoins out of
circulation would do damage to the bitcoin economy. They could also just create a "liquidity trap"
which results from deflation (put simply: everyone is hoarding coins so the economy stagnates).
This guy gets it. What bitcoin needs is long periods of relative stability so that an economy can actually start to build. Look at the recent bitcoinstarter.com launch, I'll be surprised if they don't have trouble funding right now. It doesn't take a genius to see it's silly spending money today when it looks like it'll buy you more for the same amount tomorrow. I'm dealing with that myself in starting a journalistic bitcoin podcast, we're going to have to set sponsorship prices in USD to be collected in BTC because you can't have the price of the ads constantly moving around, it's crazysauce trying to do business in this environment. |
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collapse
Full Member
Offline
Activity: 206
Merit: 102
step forward
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April 01, 2013, 10:07:36 PM |
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Liquidity is money, no money no liquidity
Laws can kill liquidity kill therefore money.
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Elacoin-ELC, Betacoin-BET, Neutroncoin-NTRN, Americancoin-AMC, Stronghands-SHND, Craftcoin-CRC, DOGE, BCH, BTC,..., Bitcoin,...(and a lot more) Linux updated wallets (source code) for: ELC, BET, AMC, NKT, SLING, CRC,...[if (blocknumber > 115000) maxblocksize= largerlimit] [I don't think the threshold should ever be 0. We should always allow at least some free transactions.]
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mindtomatter (OP)
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April 01, 2013, 10:21:45 PM |
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Depends what you mean by "Kill", if you mean dramatically reduce the price and send it underground than yes - If you mean make people stop wanting and trying to use cryptocurrencies, than no. Liquidity is money, no money no liquidity
Laws can kill liquidity kill therefore money.
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gollum
Sr. Member
Offline
Activity: 434
Merit: 250
In Hashrate We Trust!
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April 01, 2013, 11:26:03 PM |
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I'm Wall Street and I want to screw bitcoin. This is my plan: " The Fed hates BitCoin but realizes that it cannot be destroyed so Fed gave us (Wall Street) the mission to control BitCoin.
Our strategy is to first let average joe investors speculate in it by introducing Bitcoin ETF at the NY Stock Exchange so a bubble can grow.
Then we will create options and futures in bitcoin at www.cmegroup.com so people can speculate in derivatives so the bubble becomes even bigger. We take the other side of the trades and make huge profits when the bubble bursts. And we of course buy major holdings in bitcoin after the 90% crash which will be triggered by attacks from us against the bitcoin network and later on price manipulation with algorithmic trading creating flash crashes. We now own most of the bitcoins created and issue derivatives that people speculate in that we easily manipulate. They believe that they are trading bitcoin, but in reality they are betting against the house.
Bitcoin is now enslaved in the financial system just like Gold and Silver, their prices do not reflect their true value since we have manipulated them for many many years... We will set the BTC/USD price that we wish.
Mission accomplished - The tail wags the dog." |
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MatTheCat
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April 02, 2013, 01:30:31 AM |
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I'm Wall Street and I want to screw bitcoin. This is my plan: " The Fed hates BitCoin but realizes that it cannot be destroyed so Fed gave us (Wall Street) the mission to control BitCoin.
Our strategy is to first let average joe investors speculate in it by introducing Bitcoin ETF at the NY Stock Exchange so a bubble can grow.
Then we will create options and futures in bitcoin at www.cmegroup.com so people can speculate in derivatives so the bubble becomes even bigger. We take the other side of the trades and make huge profits when the bubble bursts. And we of course buy major holdings in bitcoin after the 90% crash which will be triggered by attacks from us against the bitcoin network and later on price manipulation with algorithmic trading creating flash crashes. We now own most of the bitcoins created and issue derivatives that people speculate in that we easily manipulate. They believe that they are trading bitcoin, but in reality they are betting against the house.
Bitcoin is now enslaved in the financial system just like Gold and Silver, their prices do not reflect their true value since we have manipulated them for many many years... We will set the BTC/USD price that we wish.
Mission accomplished - The tail wags the dog." Best post of whole thread and the most likely real life scenario. Capture and manipulate market, raking in billions of profits whilst simultaneously keeping the upstart Bitcoin in its place. |
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mindtomatter (OP)
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April 02, 2013, 01:39:50 AM |
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I'm Wall Street and I want to screw bitcoin. This is my plan: " The Fed hates BitCoin but realizes that it cannot be destroyed so Fed gave us (Wall Street) the mission to control BitCoin.
Our strategy is to first let average joe investors speculate in it by introducing Bitcoin ETF at the NY Stock Exchange so a bubble can grow.
Then we will create options and futures in bitcoin at www.cmegroup.com so people can speculate in derivatives so the bubble becomes even bigger. We take the other side of the trades and make huge profits when the bubble bursts. And we of course buy major holdings in bitcoin after the 90% crash which will be triggered by attacks from us against the bitcoin network and later on price manipulation with algorithmic trading creating flash crashes. We now own most of the bitcoins created and issue derivatives that people speculate in that we easily manipulate. They believe that they are trading bitcoin, but in reality they are betting against the house.
Bitcoin is now enslaved in the financial system just like Gold and Silver, their prices do not reflect their true value since we have manipulated them for many many years... We will set the BTC/USD price that we wish.
Mission accomplished - The tail wags the dog." I thought that for quite a while, but then I realized there's not reason to financialize bitcoins because they're already the perfect financial instrument. Gold and Silver are expensive to move expensive to guard expensive to ship so paper or digital assets make all the sense in the world. But to bitcoin they actually encumber you, bitcoin is a currency built on ownership, not debt so to participate in derivatives is to introduce the risk that the counterparty will default, and with the state of regulation in Bitcoin good luck getting your money back - How's that recovery from the pirate default going? So if there are no advantages, why would the be the preferable way to invest in bitcoin? In order for it to become manipulative it would have to dwarf the real bitcoin market and I just don't see a scenario where that happens, and if it does the question must be asked "What are these people trying to do?" Does that change your opinion at all? Also - If you've enjoyed this thread, you might enjoy my most recent article intended as something to share with friends and family who might be new to Bitcoin and interested in learning a little about it's positives and negatives - You can read that here http://www.mindtomatter.org/we-should-talk-about-bitcoin.html |
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gollum
Sr. Member
Offline
Activity: 434
Merit: 250
In Hashrate We Trust!
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April 02, 2013, 02:00:02 AM |
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I'm Wall Street and I want to screw bitcoin. This is my plan: " The Fed hates BitCoin but realizes that it cannot be destroyed so Fed gave us (Wall Street) the mission to control BitCoin.
Our strategy is to first let average joe investors speculate in it by introducing Bitcoin ETF at the NY Stock Exchange so a bubble can grow.
Then we will create options and futures in bitcoin at www.cmegroup.com so people can speculate in derivatives so the bubble becomes even bigger. We take the other side of the trades and make huge profits when the bubble bursts. And we of course buy major holdings in bitcoin after the 90% crash which will be triggered by attacks from us against the bitcoin network and later on price manipulation with algorithmic trading creating flash crashes. We now own most of the bitcoins created and issue derivatives that people speculate in that we easily manipulate. They believe that they are trading bitcoin, but in reality they are betting against the house.
Bitcoin is now enslaved in the financial system just like Gold and Silver, their prices do not reflect their true value since we have manipulated them for many many years... We will set the BTC/USD price that we wish.
Mission accomplished - The tail wags the dog." I thought that for quite a while, but then I realized there's not reason to financialize bitcoins because they're already the perfect financial instrument. Gold and Silver are expensive to move expensive to guard expensive to ship so paper or digital assets make all the sense in the world. But to bitcoin they actually encumber you, bitcoin is a currency built on ownership, not debt so to participate in derivatives is to introduce the risk that the counterparty will default, and with the state of regulation in Bitcoin good luck getting your money back - How's that recovery from the pirate default going? So if there are no advantages, why would the be the preferable way to invest in bitcoin? In order for it to become manipulative it would have to dwarf the real bitcoin market and I just don't see a scenario where that happens, and if it does the question must be asked "What are these people trying to do?" Does that change your opinion at all? Also - If you've enjoyed this thread, you might enjoy my most recent article intended as something to share with friends and family who might be new to Bitcoin and interested in learning a little about it's positives and negatives - You can read that here http://www.mindtomatter.org/we-should-talk-about-bitcoin.htmlIf you are a bank, why not letting people spend bitcoins they dont have - we could end up having FRB = "Fractional Reserve Bitcoining". It is more convenient spending BitCoins on a credit card instead of having to worry about wallet.dat... Let the bank take care of the bitcoin wallet.. and its fine as long as the clients dont make a run on the bank for their bitcoins. Or why not speculate with huge leverage on BTC/USD price with fiat you dont have - just like the good old time at Bitcoinica? But now you get ZhouTonged by FXCM, CMC Markets, IG Markets, et al. instead... Financial markets in a nut shell. After all, the bank profits on us not because they are smarter than us but because we (people) are more greedy (speculative) or more lazy (credit cards) than them. |
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mindtomatter (OP)
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April 02, 2013, 02:06:15 AM |
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I'm Wall Street and I want to screw bitcoin. This is my plan: " The Fed hates BitCoin but realizes that it cannot be destroyed so Fed gave us (Wall Street) the mission to control BitCoin.
Our strategy is to first let average joe investors speculate in it by introducing Bitcoin ETF at the NY Stock Exchange so a bubble can grow.
Then we will create options and futures in bitcoin at www.cmegroup.com so people can speculate in derivatives so the bubble becomes even bigger. We take the other side of the trades and make huge profits when the bubble bursts. And we of course buy major holdings in bitcoin after the 90% crash which will be triggered by attacks from us against the bitcoin network and later on price manipulation with algorithmic trading creating flash crashes. We now own most of the bitcoins created and issue derivatives that people speculate in that we easily manipulate. They believe that they are trading bitcoin, but in reality they are betting against the house.
Bitcoin is now enslaved in the financial system just like Gold and Silver, their prices do not reflect their true value since we have manipulated them for many many years... We will set the BTC/USD price that we wish.
Mission accomplished - The tail wags the dog." I thought that for quite a while, but then I realized there's not reason to financialize bitcoins because they're already the perfect financial instrument. Gold and Silver are expensive to move expensive to guard expensive to ship so paper or digital assets make all the sense in the world. But to bitcoin they actually encumber you, bitcoin is a currency built on ownership, not debt so to participate in derivatives is to introduce the risk that the counterparty will default, and with the state of regulation in Bitcoin good luck getting your money back - How's that recovery from the pirate default going? So if there are no advantages, why would the be the preferable way to invest in bitcoin? In order for it to become manipulative it would have to dwarf the real bitcoin market and I just don't see a scenario where that happens, and if it does the question must be asked "What are these people trying to do?" Does that change your opinion at all? Also - If you've enjoyed this thread, you might enjoy my most recent article intended as something to share with friends and family who might be new to Bitcoin and interested in learning a little about it's positives and negatives - You can read that here http://www.mindtomatter.org/we-should-talk-about-bitcoin.htmlIf you are a bank, why not letting people spend bitcoins they dont have - we could end up having FRB = "Fractional Reserve Bitcoining". It is more convenient spending BitCoins on a credit card instead of having to worry about wallet.dat... Let the bank take care of the bitcoin wallet.. and its fine as long as the clients dont make a run on the bank for their bitcoins. Or why not speculate with huge leverage on BTC/USD price with fiat you dont have - just like the good old time at Bitcoinica? But now you get ZhouTonged by FXCM, CMC Markets, IG Markets, et al. instead... Financial markets in a nut shell. How can people spend bitcoins they don't have? Who would be the counterparty? Unlike dollars, there are not an unlimited amount of bitcoin and there is no central clearing house where all the bitcoin are stored, the ownership kept opaque to the public view. Everything in bitcoin is in the open so the fact that someone owes a HUGE amount of bitcoin that they do not actually possess could even cause an increase in the price as people anticipate this person needing to buy up supply to fulfill their contract. Derivatives REQUIRE darkness, banks make their money on the spread between what the blind seller on one side will take and what the blind buyer on the other side will pay, transparency breeds honesty - No derivatives. |
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paultramarine
Newbie
Offline
Activity: 37
Merit: 0
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April 02, 2013, 03:44:35 AM |
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I'm a central bank powerful national government and feel threatened by alternative monies, e.g. bitcoin. But cryptocurrencies gain a hold in the world before I squash them because of their incredible practicality:
1) Send to anyone instantaneously
2) Minimal fees
3) Anonymity
I know I can never kill them off completely so I will co-opt the idea with a government run (and backed!) cryptocurrency. The USDCoin! (domain name apparently already taken.) I control the network, the software, etc, but the coin acts a lot like bitcoin so the average consumer likes it, especially because it's backed by the government and most people think that's a good thing. I can keep the prices stable, too, and continue to inflate/manipulate the currency as I did with my old fiat dolla's. I can also control the level of anonymity allowing it or keeping a close eye on users. (Most people in the US might accept having to let the government track their account for the convenience of the coin, but it doesn't really matter, the gov doesn't have to restrict anonymity)
Once I've invented USDCoin I mess with the competing cryptocurrencies in the manners described previously in this thread, namely make them highly unstable and also link them to terrorism as an excuse to make them illegal. Then pass laws against them. Those coins may continue to be used in the darknet, but that small economy doesn't bother me I've managed to retake the primary economic spaces (few companies will accept the other coins against my laws).
I have regained my power - and people love the convenience of the new USDCoin!
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The only way I think to avoid the above scenario from happening is to get bitcoins to be adopted by local businesses ASAP to create independent, closed-loop bitcoin economies that are resistant to claims of the lawlessness of bitcoin, etc, because these economies would provide unlimited stories of broad, legit use of the currencies. But still, the gov could probably just argue USDCoin is as good as the coin that's also used for criminal transactions.
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mindtomatter (OP)
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April 02, 2013, 03:49:44 AM |
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I'm a central bank powerful national government and feel threatened by alternative monies, e.g. bitcoin. But cryptocurrencies gain a hold in the world before I squash them because of their incredible practicality:
1) Send to anyone instantaneously
2) Minimal fees
3) Anonymity
I know I can never kill them off completely so I will co-opt the idea with a government run (and backed!) cryptocurrency. The USDCoin! (domain name apparently already taken.) I control the network, the software, etc, but the coin acts a lot like bitcoin so the average consumer likes it, especially because it's backed by the government and most people think that's a good thing. I can keep the prices stable, too, and continue to inflate/manipulate the currency as I did with my old fiat dolla's. I can also control the level of anonymity allowing it or keeping a close eye on users. (Most people in the US might accept having to let the government track their account for the convenience of the coin, but it doesn't really matter, the gov doesn't have to restrict anonymity)
Once I've invented USDCoin I mess with the competing cryptocurrencies in the manners described previously in this thread, namely make them highly unstable and also link them to terrorism as an excuse to make them illegal. Then pass laws against them. Those coins may continue to be used in the darknet, but that small economy doesn't bother me I've managed to retake the primary economic spaces (few companies will accept the other coins against my laws).
I have regained my power - and people love the convenience of the new USDCoin!
********************************************************************
The only way I think to avoid the above scenario from happening is to get bitcoins to be adopted by local businesses ASAP to create independent, closed-loop bitcoin economies that are resistant to claims of the lawlessness of bitcoin, etc, because these economies would provide unlimited stories of broad, legit use of the currencies. But still, the gov could probably just argue USDCoin is as good as the coin that's also used for criminal transactions.
That works as long as you've got the most useful product on the market, but I don't think that would be the case. The more of a head start Bitcoin and free market cryptocurrencies get, the harder it is to put that genie back in the bottle. |
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