Bitcoin mentioned at congressional hearing.

[MoonShadow]

This "Free competition in currency act" will never pass.

Although it would be good for Bitcoin in some ways, it is a preposterous idea that would never work.

U.S. Federal Reserve Notes are backed more on our economics than on anything else, and if our government allows other "Free competition" it would basically make our money worthless. Our money is worth what it is because it is our money, and it does not take a genius to see that this kind of thing is really not in our country's best interest. Ron Paul only mentioned Bitcoin because it fits into his fundamentalist agenda. He is an extremist and although his small group of supporters are really loud and good at making themselves look big, when it comes down to it, they are a small group who carry little votes.

It will never pass because it would work.  It wouldn't make the US FRN worthless, it would simply expose the present reality.  The US FRN is already worthless.  It wouldn't be chosen by a market economy once the threat of force that 'legal tender' laws imply are removed.  Bitcoin would not likely be the dominate alternative, however.  Bitcoin exists in a niche because of coercive legal tender laws.  Digital gold or silver certs would almost certainly dominate.  There would be no practical reason for Bitcoin to exist.

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[hugolp]

"Our money"? Some people are too high on Kool-Aid.

[cablepair]

"Our money"? Some people are too high on Kool-Aid.

I really do not understand that comment. Can you elaborate please?

This "Free competition in currency act" will never pass.

Although it would be good for Bitcoin in some ways, it is a preposterous idea that would never work.

U.S. Federal Reserve Notes are backed more on our economics than on anything else, and if our government allows other "Free competition" it would basically make our money worthless. Our money is worth what it is because it is our money, and it does not take a genius to see that this kind of thing is really not in our country's best interest. Ron Paul only mentioned Bitcoin because it fits into his fundamentalist agenda. He is an extremist and although his small group of supporters are really loud and good at making themselves look big, when it comes down to it, they are a small group who carry little votes.

It will never pass because it would work.  It wouldn't make the US FRN worthless, it would simply expose the present reality.  The US FRN is already worthless.  It wouldn't be chosen by a market economy once the threat of force that 'legal tender' laws imply are removed.  Bitcoin would not likely be the dominate alternative, however.  Bitcoin exists in a niche because of coercive legal tender laws.  Digital gold or silver certs would almost certainly dominate.  There would be no practical reason for Bitcoin to exist.

I agree with you for the most part. our money (as in the "U.S. Federal Reserve Notes" which I am a U.S. citizen so thats why I referred to it as our money.) has value in the world economy because the USA is historically the strongest financial system ever. Our money is quite literally backed by our power and our economics and introducing government sanctioned competition would as you put it "Expose the reality". basically Our money is worth what it is because we say it is.

[JohnDoe]

So you acknowledge that the dollar only has value because people are forced to use it. Why do you defend it then?

[hugolp]

I really do not understand that comment. Can you elaborate please?

How is it your money when you can not even choose it? You are forced to use it. Can you print it? The banks and the politicians can print it. You dont. You are just forced to use it.

And what its backing the Federal Reserve dollars is the USA army. Thats why the rest of the world still use it as reserve currency.

Only fundamentalists that support using violence on their fellow citizens support imposing a currency on the rest. If the USA got rid of the monpolly on money and the people used the money they choosed the economy would function much better and crisis like the present one would not happen.

[cablepair]

So you acknowledge that the dollar only has value because people are forced to use it. Why do you defend it then?

don't get me wrong, I am not defending it at all. What I am saying is passing this wacky extremist bill is not going to do anything good for our economy, and I would bet you my entire Bitcoin wallet that it never does.

[evoorhees]

One major crisis since then was the collapse of the housing bubble. I would argue that the government was taking a largely hands-off approach.

You're joking, right?

1) Gov keeps interest rates far below what the market would set, encouraging millions of mortgage loans which otherwise would not have been taken
2) Fannie and Freddie guarantee/backstop many of the mortgage loans, removing the risk from the banks, thereby encouraging them to set standards extremely low because the risk is borne by the government enterprises.

These two factors were the majority cause of the housing calamity, and they are purely the result of government intervention in what is supposed to be a free marketplace. The housing calamity is perhaps one of the best examples of well-intentioned government programs causing terrible effects. How ironic and unfortunate that people have managed to blame the "free market" for the problem.

[Amit@bitcoin-central.net]

Was watching this and the guy said something about bitcoins around 20 minutes 30 seconds

Ron paul was listening, wonder if he knew what he was talking about.

http://mfile3.akamai.com/65722/wmv/sos1467-1.streamos.download.akamai.com/65726/hearing0913112pm.asx

Bitcoin has hit the mainstreams, The financial community knows about it now. It is just a matter of time before Bitcoin ATM start hitting the streets.

[hugolp]

So you acknowledge that the dollar only has value because people are forced to use it. Why do you defend it then?

don't get me wrong, I am not defending it at all. What I am saying is passing this wacky extremist bill is not going to do anything good for our economy, and I would bet you my entire Bitcoin wallet that it never does.

I dont understand why some USA people keep ignorantly bashing their most honest and worthy politician.

[EhVedadoOAnonimato]

Bitcoin would not likely be the dominate alternative, however.  Bitcoin exists in a niche because of coercive legal tender laws.  Digital gold or silver certs would almost certainly dominate.  There would be no practical reason for Bitcoin to exist.

Bitcoin's inflation rate will be lower than that of any natural commodity. Gold supply increases exponentially, while bitcoin supply will stop increasing one day. I'd consider bitcoins better than natural commodities for this main reason.

If there's something that might eventually beat bitcoins in a free-society, it's centralized digital currencies which would work similar to bitcoin, but without the expensive mining process, as there would be no need for a decentralized record keeping. But I'm not sure... centralized solutions are dangerous, there's the trust issue etc.

[Pieter Wuille]

Gold supply increases exponentially,

Uhm there is only a finite amount of gold in the earth's crust...

[JohnDoe]

don't get me wrong, I am not defending it at all. What I am saying is passing this wacky extremist bill is not going to do anything good for our economy, and I would bet you my entire Bitcoin wallet that it never does.

Can you explain how it would be bad for the economy? Also why do you use Bitcoin if you believe that undermining your country's currency is bad for the economy?

[hugolp]

don't get me wrong, I am not defending it at all. What I am saying is passing this wacky extremist bill is not going to do anything good for our economy, and I would bet you my entire Bitcoin wallet that it never does.

Can you explain how it would be bad for the economy? Also why do you use Bitcoin if you believe that undermining your country's currency is bad for the economy?

I agree with you, just want to point out that the Federal Reserve notes are not the country currency, they are the government currency.

[cablepair]

don't get me wrong, I am not defending it at all. What I am saying is passing this wacky extremist bill is not going to do anything good for our economy, and I would bet you my entire Bitcoin wallet that it never does.

Can you explain how it would be bad for the economy? Also why do you use Bitcoin if you believe that undermining your country's currency is bad for the economy?

have you actually read this bill?

the bill was to allow open competition for the united states reserve. Anyone can just start printing up their own money and using it. its madness and it would never work.

I use Bitcoin and I love it. I have been mining it before it got big, and I have used it to buy everything from computer hardware to domain names, but Bitcoin will never be the major currency of the USA and If you think that, or the only reason you are using Bitcoin is to (your own words) "undermine the countries currency" we are complete opposites. I think you can love Bitcoin and still be patriotic and Love the USA.

Fundamentalists like Ron Paul say things that sound great, but in reality if someone like Ron Paul or Sarah Palin comes into power you better be independently wealthy or your going to be completely screwed.

[cablepair]

don't get me wrong, I am not defending it at all. What I am saying is passing this wacky extremist bill is not going to do anything good for our economy, and I would bet you my entire Bitcoin wallet that it never does.

Can you explain how it would be bad for the economy? Also why do you use Bitcoin if you believe that undermining your country's currency is bad for the economy?

I agree with you, just want to point out that the Federal Reserve notes are not the country currency, they are the government currency.

If you do not believe in democracy at all then why do you live in our country?

[mizerydearia]

don't get me wrong, I am not defending it at all. What I am saying is passing this wacky extremist bill is not going to do anything good for our economy, and I would bet you my entire Bitcoin wallet that it never does.

Can you explain how it would be bad for the economy? Also why do you use Bitcoin if you believe that undermining your country's currency is bad for the economy?

I agree with you, just want to point out that the Federal Reserve notes are not the country currency, they are the government currency.

Isn't federal reserve a company/bank?

[hugolp]

If you do not believe in democracy at all then why do you live in our country?

I do not live in the USA. But if I lived there, am I not allowed to have a different opinion and try to improve the system? Btw, if you dont agree with your president why do you live in your country?

have you actually read this bill?

the bill was to allow open competition for the united states reserve. Anyone can just start printing up their own money and using it. its madness and it would never work.

Oh my god, in your country there is open competition for food, and for clothes... Anyone can set up a hsop and start sell.ing trousers. Madness!!

Do you realize that most of the time in human history we have had competing currencies and it wored better than the present monetary system?

I use Bitcoin and I love it. I have been mining it before it got big, and I have used it to buy everything from computer hardware to domain names, but Bitcoin will never be the major currency of the USA and If you think that, or the only reason you are using Bitcoin is to (your own words) "undermine the countries currency" we are complete opposites. I think you can love Bitcoin and still be patriotic and Love the USA.

If you support a monopolly on money you are not patriotic, you are the opposite.

Btw, please expalin to me how Bitcoin is different than:

Anyone can just start printing up their own money and using it.

Fundamentalists like Ron Paul say things that sound great, but in reality if someone like Ron Paul or Sarah Palin comes into power you better be independently wealthy or your going to be completely screwed.

You have Barack Obama that its quite similar in policy to Sarah Palin and the situation is bad but ithe USA has not collapsed (yet). Ron Paul would be a real change from those two. You keep repeating that Ron Paul is a fundamentalist. Care to explain why?

[hugolp]

Isn't federal reserve a company/bank?

The Federal Reserve system is a mixed private/government system. But its mainly a government system, and the monopolly on money is imposed by the government, who delegates its management on the Federal Reserve.

[Elwar]

Here is the YouTube:

http://www.youtube.com/watch?v=-J2_opPwfqc

[Elwar]

Isn't federal reserve a company/bank?

The Federal Reserve system is a mixed private/government system. But its mainly a government system, and the monopolly on money is imposed by the government, who delegates its management on the Federal Reserve.

The only tie the US government has to the private Federal Reserve Bank is that it gets to choose the anointed head of the Federal Reserve whom is chosen from a list of the presidents of those private Federal Reserve Banks.

It would be like saying that McDonalds is a government restaurant if the US president was allowed to choose the CEO from a list of 12 vice-presidents.  (and that CEO did not have any special privileges as a majority vote of those 12 VPs would be required to do anything).