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Author Topic: Re: Bye bye bitcoin (Split: Morality of Bitcoin vs. Fiat Discussion)  (Read 5065 times)
wachtwoord
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October 18, 2013, 11:47:42 PM
 #101

"The cause is because of legal tender laws that require fiat to be accepted by those giving out loans."

What exactly does this mean? That legal tender must be accepted (i.e, if I lent you 10 BTC, when they were worth $10 apiece, and now they're $100 apiece, so I must accept $1000 USD as my payment) or that loans must be denominated in legal tender? If its the latter, how does shorting work?

The former. I must (in the US or when lending to a US citizen) accept $1000 from someone owing me 10BTC when BTC is worth $100. That is retarded and any lender who exercises that right won't ever lend from me again (you can ask me whether I would accept it though).
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DeathAndTaxes
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October 19, 2013, 12:34:24 AM
 #102

"The cause is because of legal tender laws that require fiat to be accepted by those giving out loans."

What exactly does this mean? That legal tender must be accepted (i.e, if I lent you 10 BTC, when they were worth $10 apiece, and now they're $100 apiece, so I must accept $1000 USD as my payment) or that loans must be denominated in legal tender? If its the latter, how does shorting work?

The former. I must (in the US or when lending to a US citizen) accept $1000 from someone owing me 10BTC when BTC is worth $100. That is retarded and any lender who exercises that right won't ever lend from me again (you can ask me whether I would accept it though).

An extension of this is that damages in a court of law are awarded in legal tender.

So someone borrows 100 BTC fails to repay and you sue them.  Assumming the court agrees that the debt is valid they will enter a judgement in legal tender so if the current exchange rate is $200 USD per BTC the court might award a judgement of $20,000.   You may collect the value of your damages but you have no guarantee it will be paid in anything other than legal tender.
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October 19, 2013, 12:49:22 AM
 #103

Bitcoin is not a currency. It can best be compared to rare football game card collecting. It has no value except for the imaginary value assigned to it by a small flock of enthusiasts. (Of course there is an very interesting and new technology behind it, but that is a completely different story)


The same could be said of all current, future and past currencies the only difference is the size of the "flock of enthusiasts".
With the exception that bitcoins become more rare with time and currency less rare by printing.
qwk
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October 19, 2013, 04:37:11 PM
 #104

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There's a reason why the free market chose to practically abandon gold and silver.
It's not because of Gresham's law, though. Gresham's law only describes the symptoms, but not the cause. The cause is because of legal tender laws that require fiat to be accepted by those giving out loans.
This.  The often misquoted Gresham's if often misquoted to mean "bad money displaces good money" but this important caveat is UNDER GOVERNMENTAL FORCE.
Good ol' Gresham lived in a time where classical "currency money", i.e. money that takes its value from the material value of its coins was the only "good money", whereas government issued money was considered "bad". That's why, in its original form, Gresham's law is effectively not applicable to the situation of e.g. the U.S. Dollar versus bitcoin. That's also why said law is usually quoted in its more general meaning "bad money drives out good". It is applicable for any pair of currencies, be they legal tender or not and will lead to the depreciation of the less attractive one against the more attractive up to the point where an equilibrium is reached. From then on, the bad money will be in higher circulation because it is riskier to hold on to it, making it practically more useful than the good money. In fact, the principle does not only apply to currencies, but can even be seen on job markets or elsewhere.
So, yes, you're right, Gresham's law is often misquoted, and not even applicable to today's situation.

Yeah, well... I'm gonna go build my own blockchain, with blackjack and hookers. In fact, forget the blockchain!
qwk
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October 19, 2013, 04:41:33 PM
 #105

"The cause is because of legal tender laws that require fiat to be accepted by those giving out loans."
What exactly does this mean? That legal tender must be accepted (i.e, if I lent you 10 BTC, when they were worth $10 apiece, and now they're $100 apiece, so I must accept $1000 USD as my payment) or that loans must be denominated in legal tender? If its the latter, how does shorting work?
The former. I must (in the US or when lending to a US citizen) accept $1000 from someone owing me 10BTC when BTC is worth $100. That is retarded and any lender who exercises that right won't ever lend from me again (you can ask me whether I would accept it though).
An extension of this is that damages in a court of law are awarded in legal tender.
I've always wondered why that is considered to be such a huge problem. In fact, in a European court, you will also be "forced" to accept Euros as compensation for a loan or damage or whatever. The Euro is just the fallback medium of exchange when the original good that was lent or damaged is no longer available. There just has to be some fallback. You are allowed to agree on another compensation in a court case, though (at least here in Germany), and I wonder if that's not also the case in the U.S.?

Yeah, well... I'm gonna go build my own blockchain, with blackjack and hookers. In fact, forget the blockchain!
Lethn
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October 20, 2013, 07:51:17 AM
 #106

I can't believe someone actually made the morality argument for a currency, if you're going to go their I'd argue that paper money has to be one of the evil and dishonest methods ever created by man to steal another persons wealth. Not only are people threatened with jail if they don't pay their taxes if you know anything about economics you know we could never afford such large scale infrastructure and military, so in order to even come close to affording this anyone who supports this system is passively putting their children and grandchildren into debt. The irony is that because of this no matter how parents might think they're doing their kids a favour by building all these shiny schools it won't matter in the long run because their children and grandchildren will have to pay so much that they will be forced to drop their living standards dramatically making the whole plan pointless.

What's worse for me is that if I didn't have Bitcoin I would end up paying stupid amounts just so that these scumbags can have pensions and live easier earlier in life rather than retire in what most would call the normal way because they're living longer. People rant on about how the gap between the rich and the poor are always affected but it's much worse than that because everybody is dumping the problem on children and I am utterly convinced that this is precisely why the politicians in power wouldn't dare let them vote even at the age of 16 because they know they'd vote for someone who would actually fix the problem at their expense as it should be.

In short, fuck anyone who disagrees with me, I'm keeping my wealth and you're not stealing it, if you're going to steal from me do it honestly and don't hide behind corrupt politicians and paper money because you're too scared to admit you are.
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