2013-08-16 RT - Bitcoin never to become a global currency, nothing backs it up

[StarfishPrime]

It is often said that bitcoin isn't backed by anyone, when in reality bitcoin is backed by everyone who uses it and sees value in using it.

The important distinction is that bitcoin's perceptual "backing" is entirely distributed and decentralized, and ultimately far more robust than that of a currency backed by any single political entity. In this respect bitcoin is much more like gold or silver than a national currency.

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[freedomno1]

2 Days later Germany acknowledges it
KISS MY

PS: Back to the Kitchen with you lol

[wachtwoord]

It's better to be backed by nothing than backed by silly Financial Advisors 

 

Bitcoin has more backing than anything ever has in the entire history of civilization.

[monkeybars]

Bogenrief's ignorance of human nature and social interaction is typical for mainstream economists, who study a pseudoscience the modern version of which was entirely created and sustained by the Central Banking Hegemony. Here's proof:

"The problem with Bitcoin is that unlike the dollar, unlike gold, unlike even land there is nothing actually backing it up other than the inherent trust in transactions between its users."

What she and the other charlatans don't realize is, "inherent trust in transactions between . . . users" is the most powerful form of trust in the world, especially when backed by mathematics/cryptography.

[Carlton Banks]

Bogenrief's ignorance of human nature and social interaction is typical for mainstream economists, who study a pseudoscience the modern version of which was entirely created and sustained by the Central Banking Hegemony. Here's proof:

"The problem with Bitcoin is that unlike the dollar, unlike gold, unlike even land there is nothing actually backing it up other than the inherent trust in transactions between its users."

What she and the other charlatans don't realize is, "inherent trust in transactions between . . . users" is the most powerful form of trust in the world, especially when backed by mathematics/cryptography.

Trust: the most valuable commodity there is

[freedomno1]

Bogenrief's ignorance of human nature and social interaction is typical for mainstream economists, who study a pseudoscience the modern version of which was entirely created and sustained by the Central Banking Hegemony. Here's proof:

"The problem with Bitcoin is that unlike the dollar, unlike gold, unlike even land there is nothing actually backing it up other than the inherent trust in transactions between its users."

What she and the other charlatans don't realize is, "inherent trust in transactions between . . . users" is the most powerful form of trust in the world, especially when backed by mathematics/cryptography.

Trust: the most valuable commodity there is

Agreed it's damn time we changed the economics textbooks

[Carlton Banks]

Bogenrief's ignorance of human nature and social interaction is typical for mainstream economists, who study a pseudoscience the modern version of which was entirely created and sustained by the Central Banking Hegemony. Here's proof:

"The problem with Bitcoin is that unlike the dollar, unlike gold, unlike even land there is nothing actually backing it up other than the inherent trust in transactions between its users."

What she and the other charlatans don't realize is, "inherent trust in transactions between . . . users" is the most powerful form of trust in the world, especially when backed by mathematics/cryptography.

Trust: the most valuable commodity there is

Agreed it's damn time we changed the economics textbooks

I suggested a p2p trust ledger a while ago, the idea was disliked. I still think some implementation of a system like that would be incredibly useful to a social, technological species such as us, but I don't think I'd personally be capable of coming up with anything usable. Hopefully someone will dream something up.

[Spaceman_Spiff]

I suggested a p2p trust ledger a while ago, the idea was disliked. I still think some implementation of a system like that would be incredibly useful to a social, technological species such as us, but I don't think I'd personally be capable of coming up with anything usable. Hopefully someone will dream something up.

You mean keeping tabs on whether a person is trustworthy or not?  Like you meet someone new, and through this ledger you know if he's a decent fellow or not?

[NewLiberty]

I really don't get this whole fixation on "what backs it up?".
What backs up the bread on your plate?
Imho, "backing" is a very subjective and vague term, that subtracts from talking about the properties things have.
People apparently need to hear "this money is backed by X", and then they can consider it to be safe.  Yah sorry, it's not that simple.

"Backing" is not at all subjective.  It conveys a specific meaning, that a currency is redeemable for a specific quantity of a particular asset.

The US Federal Reserve Note is backed by US Federal Reserve Notes, or "Full Faith and Credit" if you prefer. (so not backed).
The only backed currencies today are non-governmental, so that is not really the point she likely intended to make anyway.

Bitcoin has a much better chance of becoming backed, than any government currency.  The closest thing to "backing" that central banks have today is an interlocking network of soverign debt.  Each of them owe the all the others in various amounts.  The BASEL II accord still holds the metrics for that, BASEL III is not yet implemented.

[p2pbucks]

I wrote a article to refute this lady yesterday.

written in Chinese
http://p2pbucks.com/?p=6644

[solex]

You mean keeping tabs on whether a person is trustworthy or not?  Like you meet someone new, and through this ledger you know if he's a decent fellow or not?

It can't work long-term. The problem is force majeure. Many people are trustworthy for years but they hit problems with personal circumstances, failed business, uninsured accident, ill health, and they default. At some level, even the TBTF banks can be "trusted" until an economic crisis when they become totally untrustworthy. Think of Lehman.

Trust-free money and math-based protocols are the only solution to sound money and stable macro-economics.

[lonelyminer (Peter Šurda)]

Bogenrief's ignorance of human nature and social interaction is typical for mainstream economists, ...

I actually don't think that the "no backing problem" is typical for mainstream economists. Practically all economic schools agree that the main determinant for the choice of which money to use is liquidity, not "backing", and this has been recognised for over a century. Just individual economists, in particular who don't specialise in this area, occasionally forget about this.

[prophetx]

there is a really interesting academic article in draft form that argues that the imf charter needs to be amended to give virtual currencies non-member currency status, otherwise it can be used to attack and devalue an imf member state currency with the imf having no power to counteract a rapid devaluation.  it argues not only for the inclusion of virtual currencies but also that once amended the imf can ask member states to hold some amount of virtual currency should a speculative devaluation event occur.

obviously at this stage a hypothetical but should bitcoin reach 100B$ the scenario enters into the realm of meaningful probability.

i will try to post it tomorrow when i am back at home.

[prophetx]

actually i think the link is in this thread

https://bitcointalk.org/index.php?topic=230982.0

[RodeoX]

LOL. RT's argument is soooooo 2010. 

[NewLiberty]

I wrote a article to refute this lady yesterday.

written in Chinese
http://p2pbucks.com/?p=6644

精彩

!!!

If you would like to help put more "backing" on bitcoin, I am backing bitcoin with silver and gold.
In an effort to put a floor on the bitcoin valuation, I am making one ounce .999 silver Quarter Bitcoin pieces as global pieces.
These are also special because the value is flexible along with the exchange rates of bitcoin and silver so that you can read the QR code on the reverse to get the current value.  (No bitcoin is stored in these.  There is no tamper-evident hologram sticker.)  They do not function as wallets, but you can redeem your bitcoin for them.  So bitcoin has backing (though truthfully, bitcoin hardly needs it except for those new to it or who want to trade in person and don't have time to wait for block verification).

Further, the QR code is bookmarked in Chinese to honor the people there who are especially brave and forward looking and have adopted bitcoin in ever growing numbers.


I am looking for folks in China that may want these and can provide them to others there, so that when I get inquiries from people in China looking to buy locally I can send them to people in country.  There is more information and discussion here:
https://bitcointalk.org/index.php?topic=269535.0

[NewLiberty]

actually i think the link is in this thread

https://bitcointalk.org/index.php?topic=230982.0

Thanks for this.  Here's the direct link brought forward:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2248419

[Carlton Banks]

You mean keeping tabs on whether a person is trustworthy or not?  Like you meet someone new, and through this ledger you know if he's a decent fellow or not?

It can't work long-term. The problem is force majeure. Many people are trustworthy for years but they hit problems with personal circumstances, failed business, uninsured accident, ill health, and they default. At some level, even the TBTF banks can be "trusted" until an economic crisis when they become totally untrustworthy. Think of Lehman.

Trust-free money and math-based protocols are the only solution to sound money and stable macro-economics.

I don't doubt that it wouldn't have it's "defaulters", but I wouldn't like such a thing to be used only for financial purposes. I'd implement it (in part) the way the file system permissions in Unix style operating systems work: I trust Amy with my address information, Ishaq to come and browse in my shop, and the Water company to take up to $75 a quarter etc etc. And make it a kind of Diaspora style, personal server from which people can query information about you. Even if people abused the trust vested in them by others, at least we would have more information than we have right now about the kind of people we're dealing with. There are incredibly trustworthy people who, instead of getting the maximum opportunity to utilise it to the benefit of others, have it used against them instead. The trust abusers disappear off to a place where their relative trustworthiness has higher value, and their trust stock is largely undamaged. Everyone loses really, I'd argue that even the abuser does unless they're a completely remorseless psychopath (an information tool to weed those out before they go on to commit major fraud or murder? Sounds useful). And the abused feel like they can't trust anyone in general.

It just seems to me that we have the ability to create some kind of information system, based around trust itself, the world has too many people in it to have to constantly assess people for who they really are. If bad trust credentials followed you around everywhere, is that not a good motivation to always try and behave with good intentions? The difficulty I think is: what is the measure, what is a unit of trust? I have no answer to that, or at least not now. I trust some people more or less about different things, but how do you reflect that objectively?

[NewLiberty]

It'll go on your "permanent record"!

This takes the step toward the automation of externalizing conscience that is currently occupied by religion and law.