Re: Bye bye bitcoin (Split: Morality of Bitcoin vs. Fiat Discussion)

[wingding]

So many people hee complaing about the problem of diluted values, no backing etc. This is not a problem unless you have a lot of cash. Then go change it into stcks or bitcoins or whatever. And use cash only for exchange of goods. Problem solved.

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[qwk]

For something which represents no value or utility whatsoever besides its scarcity (e.g. fiat money and Bitcoin) making more of it IS theft as it effectively reduces the only benefit it has. This is not true for a tv set which does have utility.

Fiat money is not useful because of scarcity (although it can be). It is useful because it can be used as money.
But you're right about the TV, it is devalued a little less than your USD banknote if they produce more. It is devalued, though.

Let me repeat:

In common usage, theft is the taking of another person's property without that person's permission or consent with the intent to deprive the rightful owner of it.

If your central bank issues more money or banks (or you, for that matter) create money by the process of lending, this is not theft. It's part of the utility of fiat money.
Let me put it like this: would you say it's okay for me to call you a thief if you lend someone a bitcoin?

Fiat currency, unbacked by some commodity with utility/value, is the most silly thing ever.

Actually, it was a great idea that is still considered by the majority of economists to be one of the more important factors in the economic progress of modern civilization.

The underlying issue (which molecular and wachtwoord probably should've noted explicitly, since you apparently missed it) is that citizens are forced, through threat of prison (ie, violence), to use currency that gets debased. If that were not the case, there wouldn't be anything immoral about it, and it would be analogous to a company, whose stock you own, issuing more shares.

First of all, we're not talking about whether it's moral or immoral to be forced to use a currency. We're talking about whether it's theft or not.

But we're forced to use these currencies through the requirement that we pay taxes in them (and other legal tender laws), so when we get diluted, we lose value/property.

Noone forces you to hold any currency, as far as I'm aware of U.S. legislation. That you are required to settle your taxes in USD is no more a hassle than the need for buying stamps if you want to use the U.S. postal service.

[notme]

Do you mean the kind of economic progress where every 1% of GDP growth is accompanied by 2% growth in debt?  I fail to see how that is progress...

[Miz4r]

If your central bank issues more money or banks (or you, for that matter) create money by the process of lending, this is not theft. It's part of the utility of fiat money.
Let me put it like this: would you say it's okay for me to call you a thief if you lend someone a bitcoin?

I would if I was actually able to lend someone something I didn't actually have. This is what banks do. Give me the power to print paper fiat for free and I will lend it to you at interest, no problem.

[David Rabahy]

So many people hee complaing about the problem of diluted values, no backing etc. This is not a problem unless you have a lot of cash. Then go change it into stcks or bitcoins or whatever. And use cash only for exchange of goods. Problem solved.

I would absolutely love to own stocks, etc., denominated in Bitcoin.  Stocks, etc., denominated in USD are vulnerable to arbitrary devaluation.  Hmm, or would the share price tend to go up to compensate?

[Habeler876]

So many people hee complaing about the problem of diluted values, no backing etc. This is not a problem unless you have a lot of cash. Then go change it into stcks or bitcoins or whatever. And use cash only for exchange of goods. Problem solved.

I would absolutely love to own stocks, etc., denominated in Bitcoin.  Stocks, etc., denominated in USD are vulnerable to arbitrary devaluation.

me too. unfortunately i don't trust these fly-by-night bitcoin stock exchanges. just wouldn't feel secure. it's too bad. 

[qwk]

If your central bank issues more money or banks (or you, for that matter) create money by the process of lending, this is not theft. It's part of the utility of fiat money.
Let me put it like this: would you say it's okay for me to call you a thief if you lend someone a bitcoin?

I would if I was actually able to lend someone something I didn't actually have. This is what banks do.

No. That's not how the process of money creation by lending works.

Give me the power to print paper fiat for free and I will lend it to you at interest, no problem.

This is not the way the FED or the ECB work.
I know that it is easy to believe that Ben Bernanke just "fires up the printing press" and produces Dollar banknotes, but even though that might actually happen, printing paper money is largely insignificant compared to e.g. setting the federal funds rate or quantitative easing.

[westkybitcoins]

Fiat currency, unbacked by some commodity with utility/value, is the most silly thing ever.

Actually, it was a great idea that is still considered by the majority of economists to be one of the more important factors in the economic progress of modern civilization.

By Keynesians, you mean. 

The underlying issue (which molecular and wachtwoord probably should've noted explicitly, since you apparently missed it) is that citizens are forced, through threat of prison (ie, violence), to use currency that gets debased. If that were not the case, there wouldn't be anything immoral about it, and it would be analogous to a company, whose stock you own, issuing more shares.

First of all, we're not talking about whether it's moral or immoral to be forced to use a currency. We're talking about whether it's theft or not.

.....

It's theft precisely because society is coerced into using it as money. That's the linchpin making the scam work.

But we're forced to use these currencies through the requirement that we pay taxes in them (and other legal tender laws), so when we get diluted, we lose value/property.

Noone forces you to hold any currency, as far as I'm aware of U.S. legislation. That you are required to settle your taxes in USD is no more a hassle than the need for buying stamps if you want to use the U.S. postal service.

Except that:

 - No one HAS to mail a letter via the USPS. You can use UPS or Fedex (at prices above a governmentally-mandated minimum, anyway.) If you work to live, as most of us do, you MUST send your FRNs to the federal government.
 - No one is forced to accept postage stamps as "legal tender for all debts, public and private."
 - No company pays their employees in postage stamps; or does business in stamps, thus incurring the burden of converting them to FRNs to pay their employees.
 - No one is forced through threat of war to purchase oil with postage stamps.
 - No one working for the federal, state or local governments of the U.S. is going to be paid in postage stamps.
 - Government contracts aren't settled in postage stamps.
 - Etc.

The nitpicking would be fine if we actually didn't see the distinction, or if it made a difference. What's being pointed out to you is that for all practical purposes, the distinction is irrelevant.

Would just using a new word work for you? How about we call the scam "inflatascrew"? When referring to fiat shenanigans, we'll just tell everyone, "losing wealth occurs because you're being 'inflatascrewed' by your government. It's pretty much the same as being stolen from, but with these distinctions..." Surely that would satisfy your desire for semantic accuracy--because it's not as if the real issue is that you feel being stolen from this way is totally acceptable, and the whole nitpick is a distraction from that, right?

[Miz4r]

If your central bank issues more money or banks (or you, for that matter) create money by the process of lending, this is not theft. It's part of the utility of fiat money.
Let me put it like this: would you say it's okay for me to call you a thief if you lend someone a bitcoin?

I would if I was actually able to lend someone something I didn't actually have. This is what banks do.

No. That's not how the process of money creation by lending works.

But that's exactly how it works. You don't fool me anymore I am fully aware of how the system works nowadays.

Give me the power to print paper fiat for free and I will lend it to you at interest, no problem.

This is not the way the FED or the ECB work.
I know that it is easy to believe that Ben Bernanke just "fires up the printing press" and produces Dollar banknotes, but even though that might actually happen, printing paper money is largely insignificant compared to e.g. setting the federal funds rate or quantitative easing.

I'm not just talking about what Ben Bernanke or the ECB does, I am talking about how all banks and their lending in general works. If you think this is how economy progresses or should progress, I can only laugh out loud and wish you good luck with that. I however will have no part of this screwed up economy anymore, and will talk to your kind again in a decade or so from now.

[qwk]

Fiat currency, unbacked by some commodity with utility/value, is the most silly thing ever.

Actually, it was a great idea that is still considered by the majority of economists to be one of the more important factors in the economic progress of modern civilization.

By Keynesians, you mean. 

When it comes to fiat money, I don't see many Non-Keynesians argue as well.
There are economists who criticize fiat, but I tend to see them with minority. But I won't argue about that, because I don't really have numbers to back that claim.

First of all, we're not talking about whether it's moral or immoral to be forced to use a currency. We're talking about whether it's theft or not.

It's theft precisely because society is coerced into using it as money. That's the linchpin making the scam work.

I can tell you about a few fiat currencies that are not forced on people and that are commonly used.
The USD is one of them, the EUR another. In many countries across the world, it may even be illegal to use them, but they are used nonetheless.
Or how about a privately issued fiat currency that's accepted and traded worldwide? Think Bonus Miles.

Noone forces you to hold any currency, as far as I'm aware of U.S. legislation. That you are required to settle your taxes in USD is no more a hassle than the need for buying stamps if you want to use the U.S. postal service.

- No one HAS to mail a letter via the USPS. You can use UPS or Fedex (at prices above a governmentally-mandated minimum, anyway.) If you work to live, as most of us do, you MUST send your FRNs to the federal government.
 - No one is forced to accept postage stamps as "legal tender for all debts, public and private."
 - No company pays their employees in postage stamps; or does business in stamps, thus incurring the burden of converting them to FRNs to pay their employees.
[...]

I repeat: no one forces you to hold any currency, as far as I know.
That you're required to use it for a short period of time when it comes to settle your bills, is an inconvenience, no more, no less.
 

The nitpicking would be fine if we actually didn't see the distinction, or if it made a difference. What's being pointed out to you is that for all practical purposes, the distinction is irrelevant.

Okay, the nitpicking part is actually that "fiat is not theft".
It could be considered coercion, when you're forced to use it.
It could be considered fraud, if someone actually made a promise about its value and devalues it later on (but in reality, no one makes such a promise).

Would just using a new word work for you? How about we call the scam "inflatascrew"? When referring to fiat shenanigans, we'll just tell everyone, "losing wealth occurs because you're being 'inflatascrewed' by your government. It's pretty much the same as being stolen from, but with these distinctions..." Surely that would satisfy your desire for semantic accuracy--because it's not as if the real issue is that you feel being stolen from this way is totally acceptable, and the whole nitpick is a distraction from that, right?

Let's just assume for a moment that I'm not nitpicking, but I actually disagree.
Fiat is a really good concept. I've used fiat all my life and it served me quite well. So did all the people I know.

Just because we like Bitcoin that much more today should not make us spread FUD about competition.

[qwk]

I would if I was actually able to lend someone something I didn't actually have. This is what banks do.

No. That's not how the process of money creation by lending works.

But that's exactly how it works. You don't fool me anymore I am fully aware of how the system works nowadays.

I just googled for a second and came up with this, it should help you understand:
http://money.howstuffworks.com/personal-finance/banking/bank1.htm

[Miz4r]

I would if I was actually able to lend someone something I didn't actually have. This is what banks do.

No. That's not how the process of money creation by lending works.

But that's exactly how it works. You don't fool me anymore I am fully aware of how the system works nowadays.

I just googled for a second and came up with this, it should help you understand:
http://money.howstuffworks.com/personal-finance/banking/bank1.htm

Oh please that's basic stuff and we all know about fractional reserve banking already. I'm not some uneducated ignorant fool you know. And it doesn't refute what I wrote earlier, the fact that banks lend out stuff they don't actually have. Just think about it, perhaps you will come to the same conclusion as me and many others already have.

[qwk]

Oh please that's basic stuff and we all know about fractional reserve banking already. I'm not some uneducated ignorant fool you know. And it doesn't refute what I wrote earlier, the fact that banks lend out stuff they don't actually have. Just think about it, perhaps you will come to the same conclusion as me and many others already have.

If you find yourself with majority, rethink.

The bank has this "stuff".
In any common meaning of the word you could possibly think of.
They posses, have, hold, own, received, the money they lend.
They may not be the proprietor, but that's not necessary.

[Miz4r]

Oh please that's basic stuff and we all know about fractional reserve banking already. I'm not some uneducated ignorant fool you know. And it doesn't refute what I wrote earlier, the fact that banks lend out stuff they don't actually have. Just think about it, perhaps you will come to the same conclusion as me and many others already have.

If you find yourself with majority, rethink.

The bank has this "stuff".
In any common meaning of the word you could possibly think of.
They posses, have, hold, own, received, the money they lend.
They may not be the proprietor, but that's not necessary.

Here watch this and learn something yourself: http://www.youtube.com/watch?v=jqvKjsIxT_8

[westkybitcoins]

First of all, we're not talking about whether it's moral or immoral to be forced to use a currency. We're talking about whether it's theft or not.

It's theft precisely because society is coerced into using it as money. That's the linchpin making the scam work.

I can tell you about a few fiat currencies that are not forced on people and that are commonly used.
The USD is one of them, the EUR another. In many countries across the world, it may even be illegal to use them, but they are used nonetheless.
Or how about a privately issued fiat currency that's accepted and traded worldwide? Think Bonus Miles.

Ok, I think a clarification is in order.

You seem to be using the term 'fiat' to mean 'unbacked.'
The rest of us are using the term 'fiat' to mean the official definition: "a formal authorization or proposition; a decree". Money forced on you by people with the power to compel you.

Considering that the first usage also covers bitcoin itself, perhaps we'd be better served by keeping to the second usage?

Noone forces you to hold any currency, as far as I'm aware of U.S. legislation. That you are required to settle your taxes in USD is no more a hassle than the need for buying stamps if you want to use the U.S. postal service.

- No one HAS to mail a letter via the USPS. You can use UPS or Fedex (at prices above a governmentally-mandated minimum, anyway.) If you work to live, as most of us do, you MUST send your FRNs to the federal government.
 - No one is forced to accept postage stamps as "legal tender for all debts, public and private."
 - No company pays their employees in postage stamps; or does business in stamps, thus incurring the burden of converting them to FRNs to pay their employees.
[...]

I repeat: no one forces you to hold any currency, as far as I know.
That you're required to use it for a short period of time when it comes to settle your bills, is an inconvenience, no more, no less.

I'm sorry, but that's absurd.

When the coercion to use the money is that pervasive (and invasive,) people will also hold onto stashes of it. That's just human nature. And the people who make use of this scam know it.

The nitpicking would be fine if we actually didn't see the distinction, or if it made a difference. What's being pointed out to you is that for all practical purposes, the distinction is irrelevant.

Okay, the nitpicking part is actually that "fiat is not theft".
It could be considered coercion, when you're forced to use it.
It could be considered fraud, if someone actually made a promise about its value and devalues it later on (but in reality, no one makes such a promise).

The coercion makes it theft.

If Bob approaches Alice and *forces* her to accept his IOUs in exchange for her goods and services, and to use them in her dealings with others, then produces and distributes so many more IOUs that the ones Alice has are only worth a tiny fraction of their original value, you can argue all you want about how it's not theft but when he's locked up like a common thug for it, most of society will have little sympathy for him.

To argue that it's not theft because she didn't trade the IOUs off to Chuck quickly enough completely ignores the real issue, doesn't change the nature of Bob's actions, and is a pretty disturbing sentiment for someone to express.

Would just using a new word work for you? How about we call the scam "inflatascrew"? When referring to fiat shenanigans, we'll just tell everyone, "losing wealth occurs because you're being 'inflatascrewed' by your government. It's pretty much the same as being stolen from, but with these distinctions..." Surely that would satisfy your desire for semantic accuracy--because it's not as if the real issue is that you feel being stolen from this way is totally acceptable, and the whole nitpick is a distraction from that, right?

Let's just assume for a moment that I'm not nitpicking, but I actually disagree.
Fiat is a really good concept. I've used fiat all my life and it served me quite well. So did all the people I know.

Just because we like Bitcoin that much more today should not make us spread FUD about competition.

Fiat, as defined by the second usage above, is NOT a good concept. You say it has served you and everyone you know quite well. I'd argue it has served you all abysmally.

Sure, you could make use of it. It was *functional*. It had to at least be that for the scam to work. But it also resulted in the loss of quite a significant portion of your wealth through inflation over just the last few decades. Worse, it didn't just cause that wealth to evaporate, it enabled the theft of that wealth by insiders who quite literally profited at your expense. I can only imagine you feel fiat has served you well because you've never had the real option of living in a (well-off) society that didn't revolve around it. And of course, those profiting from it would like to keep it that way.

Acknowledging the ills of fiat is hardly FUD. There's a reason 2008 happened and that the global economy is still on shaky ground. There's a reason depositors in Cyprus had a portion of their money directly stolen from their bank accounts, an action being seriously discussed now in other parts of Europe. What else would one expect to happen when a minority is granted the ability to steal from entire societies using a scheme that not only reduces the incentive to save and produce, but that's mathematically unsustainable in the first place?

Avoiding all that nonsense is kinda the entire point of Bitcoin.

[murraypaul]

If Bob approaches Alice and *forces* her to accept his IOUs in exchange for her goods and services, and to use them in her dealings with others

You are not forced to accept fiat currency for goods and services you provide, only for settlement of debts.
And you are not forced to use fiat currency to buy goods and services from others.

But it also resulted in the loss of quite a significant portion of your wealth through inflation over just the last few decades.

Actually, like very many people, inflation has increased my overall worth, as I had more mortgage debt that savings, and that debt was also inflated away.

[bbit]

My last bitcoin finally sold! It's a relief. Bitcoin is doomed to fail. It has a price, but it has no value. It has made a few people rich, but most people shall loose. A currency? It is only speculation and nothing more. Bitcoin has not and will not become a real medium for exchange. What remains for bitcoin now is the large holders to sell out their coins, but in a tempo that does not crash the 'market'. It will be interesting to see how bitcoin's decline plays out. Good luck, either buying or selling, but if you do the former, you need it most.

Take a hike and I'll take your coins now! 

[BitcoinAshley]

This argument is hilarious. The pro-fiat guy is great. 

2% debt growth for every 1% GDP growth, yeah that's totally progress! Hahaha. Praise Ford for fiat.


Average lifespan of a fiat currency: 30 years

Current lifespan of USD (in its truly unbacked, unconvertible, wholly fiat form) 42 years

Now that's one outlier that's gonna get fucked.

[molecular]

Printing money is theft and therefore fiat money is inherently immoral.

This cannot be repeated enough. It's the biggest scam on Earth and it's hidden in plain sight!

Repetition does not make a false statement true.
Following your logic, if I buy a TV set and the producer makes just one more unit, you consider that act "theft".

In hindsight (after reading the page of thread following the page the quote is from), I realize I should've said: "Printing fiat money is theft and therefore fiat money is inherently immoral."

Yes, it's the partial removal of scarcity that constitutes the act of theft, not the production of the units. Otherwise mining bitcoins would be immoral.

[fleabag]

Bitcoin will fade away eventually. It will take awhile but its inevitable.