2013-11-19 WashingtonPost: Bitcoin needs a central banker

[jojo69]

Try to collect these reserves from people like me, who don't need banks.

Good luck buying a house.

Wait a couple of years, you might be surprised.

no doubt, my money is (literally) on bitcoin outlasting the creature from Jekyll island

[Ibian]

Are we forgetting that bitcoin is worldwide? Bernanke will not be running anything.

[niothor]

The most intelligent reply I could come reading that title.
"No it doesn't".
After that , thinking of a central banking system for bitcoin I ended up burning all my neurons .

[NewLiberty]

I hate to burst everyone's bubble ...

The Federal Reserve was created in 1913 to manage the U.S. money supply, and at this time, the U.S. was on a gold standard. Fractional reserve banking will make it possible for the Federal Reserve to manage the bitcoin money supply (with possibly limited success), but not in the way the author suggested.

I predict that the Federal Reserve will be managing the bitcoin money supply within 10 years.

That would be the biggest fail of bitcoin so I will personally make sure that this will never happen.

I think you're all misreading what "managing" means.

The fed doesn't have to buy all the bitcoins, or process transactions to "manage" the supply.  The fed will just need to decide what tools they have available.  They could issue bitcoin bonds the same way they issue dollar bonds, cuz what's the fricken difference?

Just one random thought, but to say the fed is managing the bitcoin supply in 10 years shouldn't be written off as quickly as all the replies here have done.

I believe it's a longer discussion.

Or a shorter one.
That isn't Bitcoin. 
Make an altcoin

[PenAndPaper]

Obviously the Washing Post is trolling the bitcoin community. 

[silverfuture]

Obviously the Washing Post is trolling the bitcoin community. 

yep

[axus]

Actually, consider a dystopian future; U.S. (or Chinese) Government seizes a majority of the bitcoins and builds up significant hashing power.  They accept taxes in Bitcoin, do whatever to bring them into their "strong hands".  Would you keep using bitcoin?  Assuming you can still send/receive as things work now.

[chrsjrcj]

How is the Fed supposed to manage the bitcoin supply? Buy up 30-50% of the coins that exist? Where will they get the money?? Supply and demand would set in big time and the amount of US dollars required to buy one bitcoin would skyrocket.

[odolvlobo]

How is the Fed supposed to manage the bitcoin supply? Buy up 30-50% of the coins that exist? Where will they get the money?? Supply and demand would set in big time and the amount of US dollars required to buy one bitcoin would skyrocket.

They can adjust the supply by changing the reserve requirement.

And that buying a large number of bitcoins to hold in reserve would be expensive is irrelevant when you can print as much money as you want. They already print more than 10 times the Bitcoin market cap every month.

[jgarzik]

Response: http://garzikrants.blogspot.com/2013/11/solution-to-bitcoin-volatility.html

[PenAndPaper]

Response: http://garzikrants.blogspot.com/2013/11/solution-to-bitcoin-volatility.html

The article is tongue-in-cheek.  It immediately drew sarcastic retorts from a few in the libertarian-leaning bitcoin community.

You don't have to be a libertarian to make fun of this :

There needs to be some kind of central institution. A bank of sorts. One with the bottomless ability to either pump extra Bitcoin into the market or suck it out, depending on what's needed to maintain stable prices.

It's the bitcoin protocol that forbids it per se.

Beside that it was a nice read.  

[Bitware]

In 1933, US President Franklin Deleno  Roosevelt outlawed gold possession for all American citizens.

The order criminalized the possession of monetary gold by any individual, partnership, association or corporation.