http://mashable.com/2013/04/19/stephen-colbert-bitcoin/J. Steve White
1 day ago
I find it immensely amusing that so many people who understand so little about e-commerce, about money, and about cryptography are weighing in with such certainty on the topic of bitcoin.
I get that no financial adviser in his right mind will advise his clients to buy bitcoin. There's the real possibility that bitcoin's value will drop to zero - I suspect that it's nearly certain to do so in the long term, as governments can't allow it to prosper. I would suspect at some point that bitcoin will be made illegal here in the US, in China, and other authoritarian states.
The Bitcoin conversation makes people nervous because it illustrates that modern currencies are consensual hallucinations, common agreements to believe in something, not "things of value". I make a decent income, and spend the majority of it, and probably never have more than $30 cash in my possession at any time. The rest? Numbers in a computer. My employer doesn't drive a truck to my bank and drop off cash. My bank doesn't mail cash to folks who I pay with my debit card. No, numbers are subtracted here and added there.
"But" one might object, "You can go to the bank and GET cash dollars." Except you can't (collectively). *I* can. *You* can. But *we* can't. That's called 'a run on the bank' and it means the bank ceases to exist as an operating entity. Only ~10-15% of us can, even theoretically, and in most banks it's probably more like 5%.
"But" one might object, "The greenback is backed by the U.S. Government!". This is true, but as such, the only guarantee is that the US government will accept it for the purpose of paying taxes. There are places that aren't set up for cash at all now, and there will be many more. The government is encouraging people to move AWAY from cash because cash transactions aren't inherently traceable (much like Bitcoin). Yes, you can trace cash if you mark the cash and videotape the exchange, and you can trace bitcoin if you bug the computers of the sender and the recipient, but unlike electronic transactions using credit cards, wire transfers, and bank accounts, the cash or bitcoin transaction doesn't inherently contain identifying information.
I'm not one of those individuals that says "Fiat Currencies are evil by definition!", and I think the Federal Reserve system is very clever, though still abusable (I think it would be much more sound if the marginal banking rate was considerably higher), and I'm not one of those people that tout Bitcoin as the solution to the problem. I think Bitcoin is an interesting philosophical vehicle and a gambler's bet (It's going to be very volatile for some time, I suspect); I think it could become very useful for international payments if the speculators slow down their cycle rate, but in the end I suspect it will be outlawed. But the vast majority of people pontificating about it have no clue what they're talking about. They may know money, but fail to grasp bitcoin, or they "get" bitcoin, but fail to grasp politics and finance as it's done, or they may know neither and just revel in making blusterous pronouncements, I don't know, but most are clueless.
Edit: I get that Stephen Colbert is a comedian, but I've heard people who weren't comedians say the same silly stuff lately (Dvorak, for instance).
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And I would like to add:
"What does it say about your economy when banks, pension funds, and other financial institutions hold $600Trillion in imaginary-value derivatives?"
