Rand Paul Thinks Bitcoin Should Be Backed By Stocks

[franky1]

I think this is very hard for people to grasp since a "scarce digital commodity" seems like an oxymoron at first.

scarce digital asset

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[rocks]

Definitely not getting it.  Bitcoin is backed by the thing that it already is.  Backing requires trust.  Most people dont get that bitcoin doesnt represent anything.  It is the thing.

Its funny the way bitcoin is kind of a litmus test for a certain aptitude.

Rand....

it is amazing isn't it?

having been involved since the beginning of 2011, i would've thought by now, especially after all the ramps in price and interest, that the general population would be able to comprehend basic Bitcoin principles.  nope.  sorry.  the ignorance displayed everyday astounds me.

we really are still in the early adoption stages.

This really gets to the heart of bitcoin and the misconception most have.

Bitcoin's advantage is that it is a "trustless" system, and does not have any dependencies outside side of itself. Any and all dependencies represent weak points in a system. For example if there was a centralized ledger keeper such a keeper could block your transactions if you are deemed a traitor (example Snowden) or the keeper could effectively steal your wealth by creating more units (FED Reserve).

But society has changed so much over the years that people now think nothing is real unless it is blessed by the government and "backed" by something, but that backing could itself fail. That is the weak point of our credit based system today, everything is backed by promises which ultimately if the FED can't honer will breakdown.

Paul's comments regarding "pegging" bitcoin to something are equally absurd. To "peg" bitcoin to lets say the dollar requires an entity to be able to add and withdraw the supply of bitcoin to match current market demand to keep the peg.

Countries (such as Argentina) have time and time again tried to peg their currencies to the dollar, but the problem is at some point you run out of dollars to maintain the peg and there is a violent market correction. The only way the US Gov could maintain a peg to bitcoin if they have the ability to influence the supply of bitcoins. Since the US Gov does not have this ability, it is not possible to maintain a peg.

We've lived under manipulated markets for currencies for so long that no one remembers how a truly free market functions anymore.

[BitDreams]

I would argue that it could be both scarce yet available to anyone who can type on a keyboard and press the enter key.

My bitcoin universe allows for each post on this message board to be represented in the block chain. Every twitter, every facebook post, every cookie stored on a computer, every command sent to an internet connected lightbulb to switch on and off. Maybe scarcity or value if you will, is eventually tied to status or importance. If the protocol is to enable a home security system, I'd want a rock solid layer of anonymity built into it. A mixer, allowing my wallet to track my own transactions but a trusted and lawful central authority, who would chase down evil doers who may have somehow hacked into my door lock...  a messaging system that alerts all the cameras in a community to be on the lookout for... yet thinks-first before sending neighbors of the reporting house to their windows with shotguns... moral code built in through consensus, rulings such as no victim, no crime... dignity code protecting against embarrassment (such as this half-baked post), maybe it's the Ladies Tuesday Night card club and they get together to go over their neighborhood bitcoin reports... after all, we need to have something to do after so many jobs are replaced by bitcoin - meet the new job, same as the old job - only more fun, more neighborly, complete with a peer group who generally has been proven to care... otherwise bitcoin couldn't exist, Satoshi Social Contract. - perhaps a centralized know your customer node that dials emergency services when an alarm triggers... if the protocol were to represent shares in a company, I'd want wide open disclosure to... perhaps a limited audience... such as shareholders and regulators but not competitors.

Sorry for the ramble but I have a feeling this is a forum where I'll be forgiven

Has this been said yet?  

 Bitcoin will free your mind ;->

[Chef Ramsay]

Here's another article that touches BTC and Rand Paul pertaining to when an executive in Silicon Valley asked him about it in recent times. And considering he's the Ace for liberty that will likely run for President and actually have serious shot at it, it's worth a read: http://money.cnn.com/2014/05/01/technology/rand-paul-silicon-valley.pr.fortune/index.html

Rand Paul, the undeclared yet arguably front-running Republican presidential contender, was trying to impress 40 young tech executives and entrepreneurs. Over happy-hour beers in San Francisco earlier this spring, the Kentucky insurgent fielded standard-issue queries on his opposition to National Security Agency spying practices and the Affordable Care Act. But Chris Morton, co-founder of BlockScore, an online fraud-prevention company, asked a question that tested Paul's tech chops: What did the senator think of Bitcoin?

Turns out that not only was Paul enthusiastic about its possibilities, but before its recent troubles he had asked his staff to explore how he might go about accepting campaign contributions in the digital currency. "People were impressed," said 29-year-old Garrett Johnson, the founder of SendHub and the organizer of the event.

Wooing the Patagonia-wearing, Blue Bottle coffee-sipping denizens of Silicon Valley, and especially San Francisco, may seem like a fool's errand for much of the GOP, but not for Paul, who recently made his second swing through the Bay Area in as many years. Indeed, his libertarian leanings, which can rankle Republican Party pooh-bahs, resonate in the Valley, where folks are messianic about private enterprise's potential to solve all the world's challenges. (Exhibit A: Google CEO Larry Page saying he'd rather bequeath his wealth to entrepreneur Elon Musk than to philanthropy.) Among the technorati, Paul's willingness to engage ideas outside the mainstream isn't a liability -- it's his strongest virtue.

On his recent trip in late March, he talked like a native too: publicly delivering a harangue against the federal surveillance regime at Berkeley, which earned him two standing ovations in the liberal stronghold, and privately dropping by investor Tim Draper's entrepreneurship school and gamely entertaining the billionaire's quixotic pitch for splitting California into six states. (Paul says he's dubious but hasn't formed an opinion.)

It's all part of Paul's high-stakes gambit to expand the GOP's appeal in precincts generally hostile to conservatives. "I see almost unlimited potential for us in Silicon Valley," Paul tells Fortune in an April interview in his Capitol Hill office after his trip. "Many more of them are libertarian-leaning Republicans than they are Democrats, and they may not know it yet."

[cypherdoc]

Here's another article that touches BTC and Rand Paul pertaining to when an executive in Silicon Valley asked him about it in recent times. And considering he's the Ace for liberty that will likely run for President and actually have serious shot at it, it's worth a read: http://money.cnn.com/2014/05/01/technology/rand-paul-silicon-valley.pr.fortune/index.html

Rand Paul, the undeclared yet arguably front-running Republican presidential contender, was trying to impress 40 young tech executives and entrepreneurs. Over happy-hour beers in San Francisco earlier this spring, the Kentucky insurgent fielded standard-issue queries on his opposition to National Security Agency spying practices and the Affordable Care Act. But Chris Morton, co-founder of BlockScore, an online fraud-prevention company, asked a question that tested Paul's tech chops: What did the senator think of Bitcoin?

Turns out that not only was Paul enthusiastic about its possibilities, but before its recent troubles he had asked his staff to explore how he might go about accepting campaign contributions in the digital currency. "People were impressed," said 29-year-old Garrett Johnson, the founder of SendHub and the organizer of the event.

Wooing the Patagonia-wearing, Blue Bottle coffee-sipping denizens of Silicon Valley, and especially San Francisco, may seem like a fool's errand for much of the GOP, but not for Paul, who recently made his second swing through the Bay Area in as many years. Indeed, his libertarian leanings, which can rankle Republican Party pooh-bahs, resonate in the Valley, where folks are messianic about private enterprise's potential to solve all the world's challenges. (Exhibit A: Google CEO Larry Page saying he'd rather bequeath his wealth to entrepreneur Elon Musk than to philanthropy.) Among the technorati, Paul's willingness to engage ideas outside the mainstream isn't a liability -- it's his strongest virtue.

On his recent trip in late March, he talked like a native too: publicly delivering a harangue against the federal surveillance regime at Berkeley, which earned him two standing ovations in the liberal stronghold, and privately dropping by investor Tim Draper's entrepreneurship school and gamely entertaining the billionaire's quixotic pitch for splitting California into six states. (Paul says he's dubious but hasn't formed an opinion.)

It's all part of Paul's high-stakes gambit to expand the GOP's appeal in precincts generally hostile to conservatives. "I see almost unlimited potential for us in Silicon Valley," Paul tells Fortune in an April interview in his Capitol Hill office after his trip. "Many more of them are libertarian-leaning Republicans than they are Democrats, and they may not know it yet."

you know Ron is having a hard time too.

and he's a freakin doctor, albeit an old one.

[BitDreams]

Why can't we elect doctors instead of warriors?

[greenlion]

I think Rand Paul heard something vaguely somewhere about DACs and stock issuance via blockchain, didn't understand it, and in his mind flipped it around into the notion of bitcoin being backed by stocks. His last sentence is what suggested that to me.

[Lethn]

Why can't we elect doctors instead of warriors?

I haven't done a heavy amount of research into this but I think you'll find most of the people in American politics just join the army for the political points and didn't even really fight in the wars most of the time, people like Dick Cheney for example bragged about his time as a POW but really if they're being treated relatively humanely that's nothing compared to getting shot at constantly in a war zone as most armies will keep their prisoners far away from the fighting.

It's a bit like declaring how religious you are, in America voters just love that stuff so the politicians will do whatever they can to make themselves look good, these guys will do almost anything if it kept their career going, but yes, you're right, if we elected doctors, mathematicians ( Putting them in charge of the economy instead of economists ) and scientists, our countries would be in a much better place.

[Bit_Happy]

Do I even need to say it: he obviously doesn't quite "get" Bitcoin.

I was really surprised by his comments.
The second reading wasn't quite as bad.

Edit:
He certainly doesn't have much time to read up about BTC.
Maybe some of us should email his office info about crypto...?

[Mike Christ]

The Pauls keep letting me down.  Maybe it's the generation gap.

[RomertL]

People who suggest Bitcoin should be "backed" by something, be it gold, stocks or whatever, seldom say anything about how to do it practically. It can't be done without giving up the decentralization which is the whole point with Bitcoin. A central entity would have to hold the whole value of the Bitcoin-economy in gold/stocks/whatever. A central entity that can easily be attacked by governments. This has already been tried, it was called e-gold. We all know how that went down...

[Bit_Happy]

People who suggest Bitcoin should be "backed" by something, be it gold, stocks or whatever, seldom say anything about how to do it practically. It can't be done without giving up the decentralization which is the whole point with Bitcoin. A central entity would have to hold the whole value of the Bitcoin-economy in gold/stocks/whatever. A central entity that can easily be attacked by governments. This has already been tried, it was called e-gold. We all know how that went down...

Liberty Dollar also, they had a good thing going for several years.

[herzmeister]

Bitcoin, as its own technology and system, is its own "stock". It has the stock already built in. It is backed by itself. That's the ultimate thing that newcomers from the old world have to grasp.

The 10 most important tech companies of the future (with the stocks that seem to be so important to him) will all directly or indirectly be related to Bitcoin.

Bitcoin combines IT and finance, how much more obvious can it get.

[JazzCouncil]

"Capital gains, dividends and interest would also be tax free at the individual level . . ."
http://money.cnn.com/2014/03/31/pf/taxes/rand-paul-flat-tax/index.html?iid=HP_LN


This is perhaps the single most important reason to support Rand Paul in the upcoming election cycle because it neutralizes the position of the IRS with respect to the Bitcoin payment network.

[gagalady]

Rand Paul doesn't know what he is talking about... How he can talk about bitcoin actcually not knowing It.

[Lethn]

"Capital gains, dividends and interest would also be tax free at the individual level . . ."
http://money.cnn.com/2014/03/31/pf/taxes/rand-paul-flat-tax/index.html?iid=HP_LN


This is perhaps the single most important reason to support Rand Paul in the upcoming election cycle because it neutralizes the position of the IRS with respect to the Bitcoin payment network.

The IRS and any other tax systems would be neutralised simply by companies everywhere accepting the currency, these days you could technically buy several thousands worth of gold or silver and there's no law preventing you from doing that.

[bryant.coleman]

It will be better if Bitcoins are backed by stocks, bonds, bullion and other investment material. The Bitcoin foundation can create a centralized Bitcoin exchange, and the profit from that can be used to purchase these assets.

[QuantumQrack]

Rand Paul doesn't get it.  Bitcoin or other cryptocurrencies are a new (NEW) kind of asset.  Currently there aren't many good definitions yet for bitcoin.  People are trying to put bitcoin into a predetermined size of box...and that won't work.

[Bit_Happy]

Rand Paul has proven to be really intelligent, so he will catch up.
When enough people kept asking him about Bitcoin, eventually he was bound to answer.
Over time he will learn all about it.

[Peter R]

Rand Paul has proven to be really intelligent, so he will catch up.
When enough people kept asking him about Bitcoin, eventually he was bound to answer.
Over time he will learn all about it.

Yes.  And I think over time many people will begin to catch up. 

I was having beers with my dad a few nights ago (who's held bitcoin for a while now) and he was asking about why they have value and why they are scarce.  Trying to explain it really made me realize how foreign and mind-bending the concept is. 

I was explaining how bitcoins are very difficult to find.  That right now bitcoin miners across the word are testing 60 quadrillion numbers every single second looking for that special number that will generate the next bitcoin in the chain.  I could see that he would sort of "get it" for a few seconds--how difficulty adjusts automatically, how this keeps the inflation rate known, and how this creates the situation where producing a new bitcoin costs an amount roughly equal to its value at the time.

But he kept saying "that really makes my mind bend" and he is right.  Bitcoin is unlike anything else.  It is our first scarce digital asset and anyone can find them--you just need that magic nonce.