Bitcoin Forum
April 24, 2024, 02:46:47 PM *
News: Latest Bitcoin Core release: 27.0 [Torrent]
 
   Home   Help Search Login Register More  
Pages: [1]
  Print  
Author Topic: Bitcoin and worthless fiat money - really puzzled  (Read 1685 times)
DeNovo (OP)
Newbie
*
Offline Offline

Activity: 8
Merit: 0


View Profile
November 27, 2013, 12:05:20 AM
 #1

Greetings to all Bitcoin experts and novices!

I did research quite a bit about Bitcoin and also purchased some. I do see its revolutionary potential and value however there is one thing that bothers me and I am not able to figure it out on my own. For that reason I would appreciate if more knowledgeable among the forum members could answer my question.

My question has to do with relationship between fiat currency and Bitcoin, US dollar in particular.

Here is the crux of the problem: what or who can prevent US gvt from printing/producing let's say one billion dollars (or any other isane amount of money) and purchase bitcoins with that amount of money. Once they have those BTC in their possession they have a tool to manipulate BTC market value but more importantly in theory they can purchase every single BTC there is simply because they can print unlimited amounts of worthless currency called US dollar...

Yes, you and I are using our hard earned money to buy a couple of bitcoins however those who have brought the world economy to the brink of global disaster are in a unique position to continue with their money laundry business the same way they do money laundrying when they "purchase" Saudi oil, or send $ to the Middle eastern friends... they just keep doing what they have been doing for years: exchange nothing for something...

What are your thoughts on this?

Thanks!
1713970007
Hero Member
*
Offline Offline

Posts: 1713970007

View Profile Personal Message (Offline)

Ignore
1713970007
Reply with quote  #2

1713970007
Report to moderator
1713970007
Hero Member
*
Offline Offline

Posts: 1713970007

View Profile Personal Message (Offline)

Ignore
1713970007
Reply with quote  #2

1713970007
Report to moderator
Every time a block is mined, a certain amount of BTC (called the subsidy) is created out of thin air and given to the miner. The subsidy halves every four years and will reach 0 in about 130 years.
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction.
1713970007
Hero Member
*
Offline Offline

Posts: 1713970007

View Profile Personal Message (Offline)

Ignore
1713970007
Reply with quote  #2

1713970007
Report to moderator
1713970007
Hero Member
*
Offline Offline

Posts: 1713970007

View Profile Personal Message (Offline)

Ignore
1713970007
Reply with quote  #2

1713970007
Report to moderator
Gator-hex
Hero Member
*****
Offline Offline

Activity: 490
Merit: 500


View Profile
November 27, 2013, 12:08:59 AM
 #2

Because every time they print a new dollar it becomes worth less against a bitcoin.

All they will end up doing by buying Bitcoins is send the price to the moon.

Treasury uses the Exchange Stabilization Fund (ESF) to manipulate currencies.

The Fed uses bond purchases.

Eventually they're going to end up with all the paper promises and nobody left in the market who wants to buy them back.

DeNovo (OP)
Newbie
*
Offline Offline

Activity: 8
Merit: 0


View Profile
November 27, 2013, 12:12:24 AM
 #3

Yes, I understand that part but no matter how high the price of BTC goes thay can match it with wortles $US which they can print in unlimited quantities, right?
Gator-hex
Hero Member
*****
Offline Offline

Activity: 490
Merit: 500


View Profile
November 27, 2013, 12:14:44 AM
Last edit: November 27, 2013, 12:25:25 AM by Gator-hex
 #4

Yes, I understand that part but no matter how high the price of BTC goes thay can match it with wortles $US which they can print in unlimited quantities, right?

Bitcoin is unlimited too it can match every dollar printed but in the opposite direction.

1 Bitcoin = 100,000,000 Satoshis
21m BTC = 2.1 Quadrillion currency units.

The more dollars printed the more a Satoshi will become worth.

Holding a Bitcoin is like holding a share in transaction network like Paypal or Visa. Over time as more people use the network for transactions it will become a more valuable asset to own.

speeder
Hero Member
*****
Offline Offline

Activity: 966
Merit: 501


Leading Crypto Sports Betting & Casino Platform


View Profile
November 27, 2013, 12:16:19 AM
 #5

Yes, I understand that part but no matter how high the price of BTC goes thay can match it with wortles $US which they can print in unlimited quantities, right?

If they print quintillions of USD, btc will also rise likewise, although they might buy lots of BTC at first (ie: they make the price rise with their initial purchases), the result would only be that USD get worthless against against all currenies, and BTC get some stupid sky high valuation, making all current bitcoiners (that are mostly non-rich people) become very rich.

So actually, it would be really cool if they tried that.

..Stake.com..   ▄████████████████████████████████████▄
   ██ ▄▄▄▄▄▄▄▄▄▄            ▄▄▄▄▄▄▄▄▄▄ ██  ▄████▄
   ██ ▀▀▀▀▀▀▀▀▀▀ ██████████ ▀▀▀▀▀▀▀▀▀▀ ██  ██████
   ██ ██████████ ██      ██ ██████████ ██   ▀██▀
   ██ ██      ██ ██████  ██ ██      ██ ██    ██
   ██ ██████  ██ █████  ███ ██████  ██ ████▄ ██
   ██ █████  ███ ████  ████ █████  ███ ████████
   ██ ████  ████ ██████████ ████  ████ ████▀
   ██ ██████████ ▄▄▄▄▄▄▄▄▄▄ ██████████ ██
   ██            ▀▀▀▀▀▀▀▀▀▀            ██ 
   ▀█████████▀ ▄████████████▄ ▀█████████▀
  ▄▄▄▄▄▄▄▄▄▄▄▄███  ██  ██  ███▄▄▄▄▄▄▄▄▄▄▄▄
 ██████████████████████████████████████████
▄▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▄
█  ▄▀▄             █▀▀█▀▄▄
█  █▀█             █  ▐  ▐▌
█       ▄██▄       █  ▌  █
█     ▄██████▄     █  ▌ ▐▌
█    ██████████    █ ▐  █
█   ▐██████████▌   █ ▐ ▐▌
█    ▀▀██████▀▀    █ ▌ █
█     ▄▄▄██▄▄▄     █ ▌▐▌
█                  █▐ █
█                  █▐▐▌
█                  █▐█
▀▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▀█
▄▄█████████▄▄
▄██▀▀▀▀█████▀▀▀▀██▄
▄█▀       ▐█▌       ▀█▄
██         ▐█▌         ██
████▄     ▄█████▄     ▄████
████████▄███████████▄████████
███▀    █████████████    ▀███
██       ███████████       ██
▀█▄       █████████       ▄█▀
▀█▄    ▄██▀▀▀▀▀▀▀██▄  ▄▄▄█▀
▀███████         ███████▀
▀█████▄       ▄█████▀
▀▀▀███▄▄▄███▀▀▀
..PLAY NOW..
PenAndPaper
Sr. Member
****
Offline Offline

Activity: 252
Merit: 250


View Profile
November 27, 2013, 12:19:45 AM
 #6

Yes, I understand that part but no matter how high the price of BTC goes thay can match it with wortles $US which they can print in unlimited quantities, right?

The price goes up because people who own bitcoin sell higher. There isn't a central authority or something that sets the price.
If a government prints a lot of money those money will lose their value, so you 'll have to pay much more to users who own bitcoins, in order to sell one to you.
DeNovo (OP)
Newbie
*
Offline Offline

Activity: 8
Merit: 0


View Profile
November 27, 2013, 03:51:31 AM
 #7

Thank you for your answers! I do appreciate the fact you took time to answer my questions.

However I don't think I made myself sufficiently clear. To make my point (hopefully) more understandable I will create this fictional situation:

BEGINNING OF THE SITUATION

IN the USA: There was a guy called Big Ben, he was sitting somewhere in the Washington bunker and spent time thinking: "How do I make one million dollars without doing too much harm to my own country?"

IN CHINA: One thousand of hardworking Chinese construction workers were thinking: " Chinese New Year is coming up, we have to travel home to visit our families however for the past six months all we saved was $500 (worth of RMB) each however air tickets are $1000 a piece (in RMB). What do we do?

Then someone told both Big Ben and Chinese workers about Bitcoin;

Chinese workers decided to buy one BTC each (paying in RMB) because at that time that was the exchange rate (1 BTC for $500 in RMB).

They waited one month and BTC exchange rate was $1000 (in RMB) for one BTC; they decided to sell their one thousand BTC.

Big Ben created one million dollars from thin air and bought all those one thousand BTC.


MIDDLE OF THE SITUATION

At this point Big Ben had one thousand BTC which had real value (at least 1/2 of them, first $500 000) because they were earned by hard work of one thousand Chinese construction workers.

Chinese workers had $1000 each worth of RMB; $500 was their initial investment, second $500 was profit (or capital gain, or whatever), which means in total $1 000 000 of non-existing US dollars entered Chinese monetary system however Chinese workers buy and sell in RMB therefore they may not be aware where the money came from.

END OF THE SITUATION

Chinese workers go to the travel agency and purchase their air tickets for $1000 in RMB; since RMB is pegged to US$ there was no any compensation for the fact that $1 000 000 of fake american money entered Chinese financial system, therefore Chinese construction workers indeed in one month were able to double the value of their savings ($500 in RMB).

The very same day Big Ben decides to sells his one thousand BTC to another one thousand Vietnamese factory workers who also have to travel so he gets one million dollars back, but this time those one million dollars have real value because they represent hard work of one thousand Vietnamese factory workers.

EX NIHILO NIHIL (NOTHING COMES FROM NOTHING)

So in the end Big Ben had $1 000 000 dollars of real money (Vietnamese workers' savings). He somehow managed to help Chinese workers to double their investments (in real terms - they did buy their tickets) therefore Chinese workers got $500 000 (in RMB) of someone's real money. Also he sold 1000 BTC to Vietnamese workers who converted them back into Vietnamese currency right away and introduced one million of US $ into their financial system, it appears one half of it is worthless money to begin with.

THE KEY QUESTION:

If Big Ben managed to make $1 000 000 or real money (Vietnamese workers' savings), Chinese workers made $500 000 of real money because they did purchase services (air tickets) which are indeed worth one million dollars, and Vietnamese workers broke even because they bought BTC at $1000 for BTC and sold for same price, THEN WHO IN THIS STORY LOST ONE MILLION DOLLARS?Huh

Is it the Chinese? Or Vietnamese? Definitely Big Ben did not lose anything because he used money which is totally fictional to enter into this transaction?

How many of you think, after reading this, that Satoshi Nakamoto is bold and has white beard?

How many of you think that this appears to be just another US money laundering scheme but this time on the global scale?

Or if you feel better let's not blame Americans for everything, lets call the first person Bing Ben and he is ripping off Russian construction workers... whoever can print fiat money has a tool to rip off those who invest earned money in BTC (or any other currency for that matter)...

I still do not understand how Bitcoin can build resistance towards the leeching fiat money....

WayTooGosu
Newbie
*
Offline Offline

Activity: 56
Merit: 0


View Profile
November 27, 2013, 04:05:55 AM
 #8

The government cannot simply "print money" and even if they did the rate of their dollar would simply going down, meaning they have the same money as before. With this being said, it is very unlikely that the government would dedicate that amount of money to Bitcoins.
mindfulmojo
Sr. Member
****
Offline Offline

Activity: 448
Merit: 250


View Profile
November 27, 2013, 04:49:29 AM
 #9

The government cannot simply "print money" and even if they did the rate of their dollar would simply going down, meaning they have the same money as before. With this being said, it is very unlikely that the government would dedicate that amount of money to Bitcoins.

You really have no idea how anything works do you?
DeNovo (OP)
Newbie
*
Offline Offline

Activity: 8
Merit: 0


View Profile
December 07, 2013, 03:51:24 AM
 #10

http://www.vancouversun.com/business/China+bars+banks+from+handling+bitcoin+setback+cybercurrency/9250687/story.html

It appears Chinese share my concerns.
Gator-hex
Hero Member
*****
Offline Offline

Activity: 490
Merit: 500


View Profile
December 07, 2013, 04:06:10 AM
Last edit: December 07, 2013, 04:51:33 AM by Gator-hex
 #11


It appears the banks share your concern for the loss of their business. It's no different in the UK, banks will not touch Bitcoin transactions.

It's no different to the publishing industry ignoring HTML or the music industry ignoring MP3.

It's going to happen, and it's going to shake up the old market models.

DeNovo (OP)
Newbie
*
Offline Offline

Activity: 8
Merit: 0


View Profile
December 07, 2013, 07:02:44 AM
 #12

Yes, banks definitely don't' like the sound of Bitcoin. The only problem (ok, it's not the only one but anyways) is that BTC cannot exist without the "access point" for fiat currency - very few people are in the mining business, the rest of us have to exchange paper junk for BTC and how to do that without banks? And once that gateway is open who can prevent "money-printers" to unload worthless fiat money they just "printed" for the purpose of sucking in money that really has value in exchange for something that is totally fictional (even more fictional than BTC)?
uncelestial
Newbie
*
Offline Offline

Activity: 6
Merit: 0


View Profile
December 07, 2013, 08:26:11 AM
 #13

The government cannot simply "print money" and even if they did the rate of their dollar would simply going down, meaning they have the same money as before. With this being said, it is very unlikely that the government would dedicate that amount of money to Bitcoins.

You really have no idea how anything works do you?

Do you? What we call "printing money" is the issuing of Treasury Bonds that bear interest as a temporary loan to pay for budget items that the country is bound by law to pay for, but for which it can not cover the expense through tax revenue. So unless Congress mandates that the Federal Government owns all the BTC in the world, no, they are not going to issue bonds, or "print money" to buy BTC. I can hardly think of a more dangerous speculative bet they could make with America's money; there would be well-deserved public outrage at adding to our defecit by large pruchases of crypto-currency. I don't think people realize how volatile and dangerous Bitcoin is to investors; trading BTC requires day-trader level stress management, I don't even think the people doing credit default swaps would feel good about the amount of risk in this market right now. The government wouldn't touch it with a 10 foot pole.
PenAndPaper
Sr. Member
****
Offline Offline

Activity: 252
Merit: 250


View Profile
December 07, 2013, 06:49:49 PM
 #14

And once that gateway is open who can prevent "money-printers" to unload worthless fiat money they just "printed" for the purpose of sucking in money that really has value in exchange for something that is totally fictional (even more fictional than BTC)?

I guess you wonder why the banks don't print money to buy every house, every single drop of oil, every factory and pretty much everything out there right? I mean they can print money after all... I wonder why as well...
tearfereon
Full Member
***
Offline Offline

Activity: 138
Merit: 100


View Profile
December 07, 2013, 06:55:56 PM
 #15

And once that gateway is open who can prevent "money-printers" to unload worthless fiat money they just "printed" for the purpose of sucking in money that really has value in exchange for something that is totally fictional (even more fictional than BTC)?

I guess you wonder why the banks don't print money to buy every house, every single drop of oil, every factory and pretty much everything out there right? I mean they can print money after all... I wonder why as well...

Banks will create new money only if you need loan.
DeNovo (OP)
Newbie
*
Offline Offline

Activity: 8
Merit: 0


View Profile
December 07, 2013, 09:26:15 PM
 #16

USA is "printing" at least 85 billion every month for the past 5 or so years. What do they do with that money? I'm not sure that anyone knows for sure - they say they are propping up the failing banks, buying back gvt bonds etc... however, there is a big however here, do you really think that for example 3 billion sent to the Israeli gvt every year is your hard earned cash? I don't think so, I think they just create those 3 billions from thin air, wire them to Israel (or Egypt for that matter) and they do the money laundry for them... the same thing when US wants to buy Saudi oil they just wire them a few billion which did not exist just two minutes ago and the Saudis build their fancy real-estate, invest some of that money back by buying Apple stocks etc... money launderying machine working perfectly because US dollar is the reserve currency so the whole world picks up the tab, no one can oppose it otherwise they will be bombed to dust like Iraq or Libya.

Federal Reserve is not controlled by Congress, it is rather owned and controlled by the cartel of private bankers (http://www.youtube.com/watch?v=mII9NZ8MMVM) and their power is quite symbolic in the perverted US democratic system. For example, a historical agreement is currently being negotiated, it is called Trans-Pacific Partnership (TPP) (http://action.citizen.org/p/dia/action3/common/public/?action_KEY=12285) which will give big evil corporations unprecedented power over individual nation states. This is all happening without any discussion in the US congress.

Actually gvt is buying a lot houses but not directly, they give money to the banks who just re-possessed individual homes after their owners could not make mortgage payments. Oil? I just explained how US buys oil. Factory? Sure... what is preventing them to invest billions of fake money into Chinese factories?

BTC is perfect vehicle for US gvt to continue their money laundry business... I'm not sure they created it, i'm not sure they will be able to control its development however I'm pretty sure they like it...
Pages: [1]
  Print  
 
Jump to:  

Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!