2013-11-28 Guardian: Is Bitcoin a Weapon of Mass Economic Destruction?

[Rotex]

New tack:

http://www.theguardian.com/business/economics-blog/2013/nov/28/bitcoin-potential-weapon-mass-economic-destruction?CMP=twt_gu

[Sam-Os]

This is pretty one-sided. Not everyone is in BitCoin to get rich. Some people want to protect their money from being devalued and BitCoin can give us that because there is no central regulator..granted it can be devalued by the market. He talks about "Surely it is akin to a counterfeiting scam promoted by people who like the idea of their computer making them rich without lifting much more than a finger?" But how is that any different from the bankers who just make money from nothing and then charge us interest on our own debt? Or the Wall St. folks? To me BitCoin would be a way to finally end government overspending and eliminate the banking scum middlemen who steal our savings right out of our pockets. Sure BitCoin has it's problems but at least be fair in assessing it. I think that in the end the people will have the power and the people will choose what they want. HOPEFULLY the internet age and technology will provide this to us. The only thing I fear is the government making a functioning quantum computer and using it to ruin everything somehow.

[tutkarz]

As Paul Krugman, the Nobel prize-winning economist, wrote more than two years ago: "What we want from a monetary system isn't to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich. And that's not at all what is happening in Bitcoin."

I don't know if he noticed, that it is not working as intended. Because people who have money will invest them in houses or other things, they not only get richer while others don't they also increase price of houses for other people so they can't afford one when they need them for living and not for investment. And it is not only for houses but for everything people invest money in to not lose value of they fiat.

[cr1776]

Agreed. Krugman is a hack who supports the authoritarians and gets rewarded for doing so.

As Paul Krugman, the Nobel prize-winning economist, wrote more than two years ago: "What we want from a monetary system isn't to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich. And that's not at all what is happening in Bitcoin."

I don't know if he noticed, that it is not working as intended. Because people who have money will invest them in houses or other things, they not only get richer while others don't they also increase price of houses for other people so they can't afford one when they need them for living and not for investment. And it is not only for houses but for everything people invest money in to not lose value of they fiat.

[zeroday]

The end (of obsolete banskters) is near

[freedomno1]

Lmao I'm afraid of a change in the status quo
IT MUST BE A WED
Weapon of Mass Economic Destruction
New terminology
Something that revolutionizes finance in ways not expected that has huge effect on the way business is handled

Just like the internet

[StarfishPrime]

As Paul Krugman, the Nobel prize-winning economist, wrote more than two years ago: "What we want from a monetary system isn't to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich. And that's not at all what is happening in Bitcoin."

I don't know if he noticed, that it is not working as intended. Because people who have money will invest them in houses or other things, they not only get richer while others don't they also increase price of houses for other people so they can't afford one when they need them for living and not for investment. And it is not only for houses but for everything people invest money in to not lose value of they fiat.

Remember, Paul Krugman may not be quite the visionary he's made out to be. He also made this prediction about the internet:

"By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's."

[oakpacific]

Yes, it's, why did you just realize it, it's too late, where is your laughter now?

About the macroeconomist, they are only relevant as long as can interfere the economy, otherwise who will give them a damn if the free market can figure things out on its own?

[hacknoid]

In the meantime, businesses should shun the currency. It is no surprise that Virgin boss Richard Branson, who loves to pose in anti-establishment garb, has embraced Bitcoin. That does not mean anyone else should. Shareholders should demand real money in exchange for goods and services, for the good of society at large.

No, shareholders DO demand a ROI, which is accomplishes by reducing waste and expenses and increasing profits.  (Smart) businesses move to Bitcoin because it increases their bottom line with lower fees, and is a superior solution to the legacy banking. 

Sorry, Phillip,  but you can't just say "ignore the superior solution" because it challenges the status quo.  That's called technological evolution, and it will succeed by natural selection. 

And BTW, the original supporters of Bitcoin should not be criticized for making a profit because of Bitcoin's success; they were the original true believers; the ones that spent time, effort and their own money to support a system that they believed in.  They put up with ridicule (from family, friends and media), an uncertain future, and weathered the roughest early days.  They put up with fraudsters and scammers and tried to improve the community and the image of Bitcoin, all in order to show people what it is capable of.   I guarantee that those who stuck with Bitcoin from the beginning and still believe in it still have a stake, and that stake is being rewarded.  Those who didn't took profit early and got out.   Should you criticize the people who work long hours at a startup that ultimately succeeds?

Bottom line:
Whatever Bitcoin will do, it will do because the need is there.  Nobody is forced to use it; it it works, the world has to wake up to the fact that there was a problem.  Don't blame Bitcoin, the early adopters or the current supporters.

FFS...

[Carlton Banks]

Weapon of Mass "Bankster" Destruction

[waxwing]

Read user "glorian"'s wonderful evisceration of this chucklehead's analysis: http://discussion.theguardian.com/comment-permalink/29332868

Fantastic.

[Mike Christ]

inb4 domestic drone strikes of suspected economic terrorists

[StarfishPrime]

Read user "glorian"'s wonderful evisceration of this chucklehead's analysis: http://discussion.theguardian.com/comment-permalink/29332868

Fantastic.

It is! Definitely worth a repost here for posterity:

glorian
28 November 2013 7:49pm

Eighty-seven percent of the nation’s top economists think that the digital currency, Bitcoin, has “limited usefulness.”
Wow. So a technology that eliminates transaction fees, Internationally, over the Internet, has "limited usefulness"
Anyone can create what amounts to a checking account, for free. Only no overdraft is possible. Payments clear in minutes. Your boss can pay you with "direct deposit" in seconds (no special service required). You can pay anyone else in the world, and they can pay you. Securely, with no double spends, no charge backs, no bad checks. Wells Fargo charges me 10 bucks a month for a dim shade of that, but it seems accountslike this are of "limited usefulness".
Bitcoin solves the micro payment problem. You can actually make very small payments with smaller yet transaction fees, and it just works. but that is of "limited usefulness".
As long as you can figure out how to secure your private keys (by printing them and putting the only copies in a safety deposit box, memorizing them, or engraving them inside a ring), your Bitcoins will be protected by 256 bit encryption. Banks use 128 bit encryption, but the difficult of breaking encryption doubles with each bit. That means if BS = Bank Security, then Bitcoin Security = BS x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2. Obviously increasing security like that is of "limited usefulness"
Bitcoin is going to inflate, just like the Dollar, for another 30 years, only WAY slower. Since 2008 the Federal Reserve has printed TWO Dollars for free for every Dollar you worked to earn, or saved, or acquired through taking the risk of investing. Actually for every dollar that existed prior to 2008. In just a year or two. Bitcoin has predetermined inflation programed into it so you can know what is going on. And those newBitcoin are given to the people "mining", who are actually doing all the verification and validation of the ecosystem. Huh. Giving people Bitcoin for actually doing something useful for everyone else. That is clearly of "limited usefulness".
Bitcoin may make early adopters rich. Like early investors in Apple, or in Plastics (watch "It's a Wonderful Life" again!), or in Microsoft, or IBM, or Exxon... Heck in anything successful. Don't let Economists tell you it isn't fair to be an early adopter! Figuring out why a technology changes the game, and getting in early (to them) is of "limited usefulness".
Maybe just trying to reply to this is of "limited usefulness". ;-)

 

[Carlton Banks]

Banker Busters!

[Carlton Banks]

LAN-ed mines?!!

[LiteCoinGuy]

Banker Busters!

you dont like banksters i guess   

[aigeezer]

Read user "glorian"'s wonderful evisceration of this chucklehead's analysis: http://discussion.theguardian.com/comment-permalink/29332868

Fantastic.

It is! Definitely worth a repost here for posterity:

glorian
28 November 2013 7:49pm

Eighty-seven percent of the nation’s top economists think that the digital currency, Bitcoin, has “limited usefulness.”
Wow. So a technology that eliminates transaction fees, Internationally, over the Internet, has "limited usefulness"
Anyone can create what amounts to a checking account, for free. Only no overdraft is possible. Payments clear in minutes. Your boss can pay you with "direct deposit" in seconds (no special service required). You can pay anyone else in the world, and they can pay you. Securely, with no double spends, no charge backs, no bad checks. Wells Fargo charges me 10 bucks a month for a dim shade of that, but it seems accountslike this are of "limited usefulness".
Bitcoin solves the micro payment problem. You can actually make very small payments with smaller yet transaction fees, and it just works. but that is of "limited usefulness".
As long as you can figure out how to secure your private keys (by printing them and putting the only copies in a safety deposit box, memorizing them, or engraving them inside a ring), your Bitcoins will be protected by 256 bit encryption. Banks use 128 bit encryption, but the difficult of breaking encryption doubles with each bit. That means if BS = Bank Security, then Bitcoin Security = BS x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2 x 2. Obviously increasing security like that is of "limited usefulness"
Bitcoin is going to inflate, just like the Dollar, for another 30 years, only WAY slower. Since 2008 the Federal Reserve has printed TWO Dollars for free for every Dollar you worked to earn, or saved, or acquired through taking the risk of investing. Actually for every dollar that existed prior to 2008. In just a year or two. Bitcoin has predetermined inflation programed into it so you can know what is going on. And those newBitcoin are given to the people "mining", who are actually doing all the verification and validation of the ecosystem. Huh. Giving people Bitcoin for actually doing something useful for everyone else. That is clearly of "limited usefulness".
Bitcoin may make early adopters rich. Like early investors in Apple, or in Plastics (watch "It's a Wonderful Life" again!), or in Microsoft, or IBM, or Exxon... Heck in anything successful. Don't let Economists tell you it isn't fair to be an early adopter! Figuring out why a technology changes the game, and getting in early (to them) is of "limited usefulness".
Maybe just trying to reply to this is of "limited usefulness". ;-)

 

I read this one over and over, smiling all the while. It's a classic. I try not to do "me too" posts, but... glorian for Fed Chair! (Who is glorian, anyway? Can't find a trail on the Net but he/she is a Superhero).

[Carlton Banks]

Banker Busters!

you dont like banksters i guess   

Just doing some "Weapons of Mass Economic Destruction" puns. Try one.

Inter-continental ballistic monetary system

[creekbore]

I suppose its only to be expected here but thus far I've not read any responses that actually comprehensively refute the issues the article raises, which is quite disappointing. 

And I find the response that glorian posted, while containing some interesting information, actually reads as an elitist and rather poorly written rant.  It certainly doesn't address the fact that the last GFC was indeed caused not by regulations, but by lack of regulations.  The idea that anther unregulated market is going to turn out the same is highly likely.

As Buffet says "there's an economic war going on and the rich are winning" - I'd suggest most btc-coiners simply want to make sure they are on the right side. This forum is probably the most visible representation of btcoiners and let's be honest there are more users motivated by personal greed than altruism. 

This was also a below the line response and I can refute some parts of it myself. 

What is Bitcoin supposed to be to make it valuable? Is it a currency, is it a technology, or is it a commodity?
If it's a currency, what real wealth is it backed by? What entity, state or otherwise, stands behind it and what are that's entity's resources, history and trustworthiness? What in the real world is it a claim against?
If it's a technology, how does buying individual Bitcoins buy you a share in that technology? The first steam engine was a tremendous piece of economically transformative innovation. That didn't make the steam coming out of it any more valuable than clouds.
If it's an asset, what is there about it that makes it valuable beyond expectations of its future price? A house I can live in. Pork bellies I can eat. What can I do with a Bitcoin?
Anybody thinking about buying into this nonsense should to my mind be forced to sit down with a copy of Kindleberger's Manias, Panics and Crashes, read chapter 2 in its entirety, then reflect on how perfectly Bitcoin and current economic conditions fit a pattern he traces back centuries.

However, the current phase of 'bitcoin mania' as represented in the popular press at present certainly does reflect Kindleberger's description.

It's difficult for us to escape our collective behaviour and, as I see it, the only way to do so is to change our individual behaviour. 

I've been following btc since late 2011 so I'm neither a noob nor a zealot nor a sceptic - just interested.  But it does seem that this community is high on fervour, low on rationality.  So, wouldn't it be a good idea to actually engage with critics in a calmer manner and not dismiss potential issues, either practical or conceptual, technical or moral, without exploring the validity of our own position?

[Carlton Banks]

I suppose its only to be expected here but thus far I've not read any responses that actually comprehensively refute the issues the article raises, which is quite disappointing. 

Hash-trogen bomb?