Is there room for a State Run Cryptocurrency?

[counter]

I think it is a good idea and could work it the developers are trustworthy and competent.  There would need to be real discussion in depth of the plans and benefits to sell the idea.   If your going to go this route you need real planing and infrastructure already in place because this isn't going to be an experimental currency.

[giveBTCpls]

I've been thinking about this lately a lot: How could a state be run with Bitcoin when it's soooo volatile? isn't a solid stability in price a necessity for a currency be realiable? what is the purchasing power of 1BTC without the references on FIAT?

[twiifm]

No, that was not my claim, you just see what your eyes want to see. I was not talking about QE "printing money". There is no inflation out of this, since the QE money doesn't leak into circulation. I was talking about how debts are socialized and the burden of them is passed on to the taxpayer in general (by means of inflation).

Is this your original claim?  that if FDIC needs money.  Fed prints money.   Inflation follows.   Taxpayers "pay the debt" of the FDIC via "debt socialization"

You might have noticed (well, you actually didn't) that I was talking about how socialization of debts works, and I specifically mentioned "in general". Regarding the FDIC, I don't know how much money they might potentially need, but if you insist, the answer is affirmative. In the worst case scenario, the sequence you described would necessarily lead to inflation (since the money "lost in debt" didn't disappear but just changed hands).

In the event that the FDIC fund is insufficient,  the FDIC has credit at the Treasury.   The Fed isn't even in the picture.  Theres no protocol so an act of Congress is probably required to do what you are suggesting

Even if the Fed lends them money,  then the borrower (FDIC)  pays back the loan not taxpayers.   

Do you know what the word "indirectly" means, which I used in respect to ordinary people paying for the bank debts? What regards the real world evidence of debt socialization, Google is your friend (I hope you understand that you are presently not in the position of asking me to prove you anything).

LOL.   You made the claim so you prove it.  Prove that taxpayers pay for bank debts.

I guess you don't know anything about accounting.   

You can't even get the concept right.   Its "privatized profits,  and socialized losses". 

[polynesia]

I've been thinking about this lately a lot: How could a state be run with Bitcoin when it's soooo volatile? isn't a solid stability in price a necessity for a currency be realiable? what is the purchasing power of 1BTC without the references on FIAT?

When speculative demand ends and as adoptions increases, BTC is expected to become less volatile.

[twiifm]

I've been thinking about this lately a lot: How could a state be run with Bitcoin when it's soooo volatile? isn't a solid stability in price a necessity for a currency be realiable? what is the purchasing power of 1BTC without the references on FIAT?

When speculative demand ends and as adoptions increases, BTC is expected to become less volatile.

If a state uses a crypto it won't be bitcoin.   Bitcoin is volatile because its speculative. 

The Fed operates a big clearing system.   If anything they'll use blockchain technology to run this clearing system.   USD is legal tender and that wouldn't change.   What changes is that users have option to hold the crypto USD in their own wallets and transfer it digitally without 3rd party

[tee-rex]

No, that was not my claim, you just see what your eyes want to see. I was not talking about QE "printing money". There is no inflation out of this, since the QE money doesn't leak into circulation. I was talking about how debts are socialized and the burden of them is passed on to the taxpayer in general (by means of inflation).

Is this your original claim?  that if FDIC needs money.  Fed prints money.   Inflation follows.   Taxpayers "pay the debt" of the FDIC via "debt socialization"

You might have noticed (well, you actually didn't) that I was talking about how socialization of debts works, and I specifically mentioned "in general". Regarding the FDIC, I don't know how much money they might potentially need, but if you insist, the answer is affirmative. In the worst case scenario, the sequence you described would necessarily lead to inflation (since the money "lost in debt" didn't disappear but just changed hands).

In the event that the FDIC fund is insufficient,  the FDIC has credit at the Treasury.   The Fed isn't even in the picture.  Theres no protocol so an act of Congress is probably required to do what you are suggesting

Even if the Fed lends them money,  then the borrower (FDIC)  pays back the loan not taxpayers.   

Do you know what the word "indirectly" means, which I used in respect to ordinary people paying for the bank debts? What regards the real world evidence of debt socialization, Google is your friend (I hope you understand that you are presently not in the position of asking me to prove you anything).

LOL.   You made the claim so you prove it.  Prove that taxpayers pay for bank debts.

I guess you don't know anything about accounting.   

You can't even get the concept right.   Its "privatized profits,  and socialized losses". 

Did you forget about your own claims dude? I was not talking about privatizing profits, which you obviously failed to see, but was talking about just one particular example of socializing losses, i.e. socializing bank debts. Nevertheless, I'm pleased that you finally looked at what Google says about this notion.

[twiifm]

Did you forget about your own claims dude? I was not talking about privatizing profits, which you obviously failed to see, but was talking about just one particular example of socializing losses, i.e. socializing bank debts. Nevertheless, I'm pleased that you finally looked at what Google says about this notion.

Your claim was that if FDIC fund was insufficient the Fed would print money to lend them.  This is already not true.  Credit comes from the Treasury who can not expand money supply

Even IF this was true, then its the FED that holds the debt not the public.  

IF the FDIC is borrowing from the public then the public is holding debt making it an asset for the public (not a liability).  

Debts & losses  are not same things.  Loss refers to income.  Debt refers to asset / liability.  You can't use these terms interchangeably unless you don't understand accounting

Please, if you have a point then explain yourself instead of giving straw men  

[allsopfree]

State would not be happy to see your OP, since that is very negative for the state.

[tee-rex]

Did you forget about your own claims dude? I was not talking about privatizing profits, which you obviously failed to see, but was talking about just one particular example of socializing losses, i.e. socializing bank debts. Nevertheless, I'm pleased that you finally looked at what Google says about this notion.

Your claim was that if FDIC fund was insufficient the Fed would print money to lend them.  This is already not true.  Credit comes from the Treasury who can not expand money supply

Even IF this was true, then its the FED that holds the debt not the public. 

IF the FDIC is borrowing from the public then the public is holding debt making it an asset for the public (not a liability). 

Debts & losses  are not same things.  Loss refers to income.  Debt refers to asset / liability.  You can't use these terms interchangeably unless you don't understand accounting

Please, if you have a point then explain yourself instead of giving straw men 

Haven't I already explained it that the Fed would print money for the FDIC after Congress would pass a corresponding act in case there is a need for such a legislation? Where did you get that the FDIC would be borrowing from the public? Please show me that part. Debts incur losses (if not paid indeed), they are just the two sides of the same coin. And if loss refers to income (according to your words), what the heck you began talking about losses when we were talking about debts?

[twiifm]

Haven't I already explained it that the Fed would print money for the FDIC after Congress would pass a corresponding act in case there is a need for such a legislation? Where did you get that the FDIC would be borrowing from the public? Please show me that part. Debts incur losses (if not paid indeed), they are just the two sides of the same coin. And if loss refers to income (according to your words), what the heck you began talking about losses when we were talking about debts?

Theres no protocol for FDIC getting money from the Fed.  FDIC would get money from Treasury.  I said this like 3 times already.  You are explaining something you made up and does not reflect any factual evidence.  Just doesn't work how you imagine.  Accept it or go on being ignorant

If FDIC borrows the money the debt isn't "socialized" because its the FDIC that holds the debt.  You are claiming that FDIC borrows money and taxpayers has to repay the debt.  WRONG.  FDIC repays the debt.  Theres no way for them to pass it off to taxpayers.  They can pass it on to banks by raising premiums then banks can pass onto bank customers by raising fees. 

If you explained how I just did then you can argue the concept "privatized profits, socialized losses"  NOT "socialized debts".  You can't pass off your debts like that.  You can default or you can restructure

Debt is not losses.  Debt is an asset for lender and liability for borrower.  If you borrow $1M to buy a house you didn't lose $1M.  You have a liability.  If the house falls below your buying price then you lose money.  You can't even get simple concepts right

[rugrats]

Hi,

I've been asking for opinions about a proposal that's come up here in Scotland.  We're going to the polls in the next month to decide whether we want to split from England and become an independent country - basically the end of the United Kingdom that's lasted 400 years.

There's been plenty of discussion not only on whether we should, but whether we could (practically.)  One of the major stumbling blocks is the use of GBP - the Bank of England has said a post-independent Scotland can't use it.  Bit mean, but there you are.

I'm sorry, but why would Scotland even consider using a currency under the control of a foreign government?

So the question came up - If Scotland needs a new currency, why not set up a State-Run Cryptocurrency?

Here's my thoughts on the issue. 

http://cryptocurrencymadesimple.com/should-scotland-set-up-a-state-run-cryptocurrency/

Also, it appears that Ecuador got there first:

http://cryptocurrencymadesimple.com/ecuador-nationalise-cryptocurrency/

Would love to here what you guys think.

Adopting a national cryptocurrency would require the participation of all the citizens.
Scotland, as of 2012, has a home internet access and personal internet use rate of 67% and 71% respectively.
Potentially up to a third of its citizens could be excluded from the new crypto landscape. That is, for lack of a better word, tyrannical.

Further, existing banking infrastructure, private and public debts, monetary instruments, etc. would all go into major upheaval at the sudden imposition of a cryptocurrency.

Cryptocurrency must be allowed to grow organically - not imposed, IMHO.

[santaClause]

Did you forget about your own claims dude? I was not talking about privatizing profits, which you obviously failed to see, but was talking about just one particular example of socializing losses, i.e. socializing bank debts. Nevertheless, I'm pleased that you finally looked at what Google says about this notion.

Your claim was that if FDIC fund was insufficient the Fed would print money to lend them.  This is already not true.  Credit comes from the Treasury who can not expand money supply

Even IF this was true, then its the FED that holds the debt not the public. 

IF the FDIC is borrowing from the public then the public is holding debt making it an asset for the public (not a liability). 

Debts & losses  are not same things.  Loss refers to income.  Debt refers to asset / liability.  You can't use these terms interchangeably unless you don't understand accounting

Please, if you have a point then explain yourself instead of giving straw men 

Haven't I already explained it that the Fed would print money for the FDIC after Congress would pass a corresponding act in case there is a need for such a legislation? Where did you get that the FDIC would be borrowing from the public? Please show me that part. Debts incur losses (if not paid indeed), they are just the two sides of the same coin. And if loss refers to income (according to your words), what the heck you began talking about losses when we were talking about debts?

If it comes down from it the FDIC would need to borrow money from the government via it's line of credit at the Treasury. Since the government is run "by the people and for the people" and since the public pays taxes to the government, the FDIC would essentially be borrowing from the public.

[Razick]

As much as I am in favor of Bitcoin I don't think it is well tested enough. I would wait 5 years or so at the least, and take everything the community learned over that time into consideration before making a national cryptocurrrency.

That may make it sound as though I have a negative view of Bitcoin, but I don't. Bitcoin is the only digital currency even remotely close to meeting my standards for a national currency. In my opinion, a centralized 100% digital currency simply isn't acceptable.

Cryptocurrencies like Bitcoin have finally begun to make digital currencies a viable option.

[redHeadBlunder]

As much as I am in favor of Bitcoin I don't think it is well tested enough. I would wait 5 years or so at the least, and take everything the community learned over that time into consideration before making a national cryptocurrrency.

That may make it sound as though I have a negative view of Bitcoin, but I don't. Bitcoin is the only digital currency even remotely close to meeting my standards for a national currency. In my opinion, a centralized 100% digital currency simply isn't acceptable.

Cryptocurrencies like Bitcoin have finally begun to make digital currencies a viable option.

I agree. Bitcoin is way too new to be used universally throughout any country by any means. There is also not sufficient technology in place is the majority of countries as smart phone access does not reach all corners of any country.

[Razick]

As much as I am in favor of Bitcoin I don't think it is well tested enough. I would wait 5 years or so at the least, and take everything the community learned over that time into consideration before making a national cryptocurrrency.

That may make it sound as though I have a negative view of Bitcoin, but I don't. Bitcoin is the only digital currency even remotely close to meeting my standards for a national currency. In my opinion, a centralized 100% digital currency simply isn't acceptable.

Cryptocurrencies like Bitcoin have finally begun to make digital currencies a viable option.

I agree. Bitcoin is way too new to be used universally throughout any country by any means. There is also not sufficient technology in place is the majority of countries as smart phone access does not reach all corners of any country.

Right. Even in rich countries like the US and EU not everyone has a smart phone or PC, not to mention internet. I suppose the government could distribute hardware wallets. Although chances are they'd screw that up worse than Butterfly labs. $600M for a website that doesn't even work proves their technological and fiscal incompetence.

[tee-rex]

Haven't I already explained it that the Fed would print money for the FDIC after Congress would pass a corresponding act in case there is a need for such a legislation? Where did you get that the FDIC would be borrowing from the public? Please show me that part. Debts incur losses (if not paid indeed), they are just the two sides of the same coin. And if loss refers to income (according to your words), what the heck you began talking about losses when we were talking about debts?

Theres no protocol for FDIC getting money from the Fed.  FDIC would get money from Treasury.  I said this like 3 times already.  You are explaining something you made up and does not reflect any factual evidence.  Just doesn't work how you imagine.  Accept it or go on being ignorant

Why do you read my posts so carelessly? In case the FDIC cannot cover the defaulted banks debts (which have become losses) by the available means (money from the Treasury), Congress would have to pass an act that would make the Fed print more money. It doesn't matter if this money is obtained by the FDIC from the Treasury or directly from the FED. You are trying to get away with petty semantics and particulars leaving out the whole point of passing debts (which are now losses) on to taxpayers indirectly. Read again, indirectly.

If FDIC borrows the money the debt isn't "socialized" because its the FDIC that holds the debt.  You are claiming that FDIC borrows money and taxpayers has to repay the debt.  WRONG.  FDIC repays the debt.  Theres no way for them to pass it off to taxpayers.  They can pass it on to banks by raising premiums then banks can pass onto bank customers by raising fees.

You again failed to notice that I said "indirectly". How many times should I repeat it once you take notice? The FDIC repays the debt with the newly printed money, but the money which made up the debts didn't disappear into nothing. Is it that hard to understand?
  

Debt is not losses.  Debt is an asset for lender and liability for borrower.  If you borrow $1M to buy a house you didn't lose $1M.  You have a liability.  If the house falls below your buying price then you lose money.  You can't even get simple concepts right

Uncollectible debts become losses and are written off as such. In effect, it means that you can't get back the money that has been loaned, but the money is still there, it just changed hands. This is just what happens when a bank defaults (read, has no more money). Gonna deny this?

[tee-rex]

Did you forget about your own claims dude? I was not talking about privatizing profits, which you obviously failed to see, but was talking about just one particular example of socializing losses, i.e. socializing bank debts. Nevertheless, I'm pleased that you finally looked at what Google says about this notion.

Your claim was that if FDIC fund was insufficient the Fed would print money to lend them.  This is already not true.  Credit comes from the Treasury who can not expand money supply

Even IF this was true, then its the FED that holds the debt not the public. 

IF the FDIC is borrowing from the public then the public is holding debt making it an asset for the public (not a liability). 

Debts & losses  are not same things.  Loss refers to income.  Debt refers to asset / liability.  You can't use these terms interchangeably unless you don't understand accounting

Please, if you have a point then explain yourself instead of giving straw men 

Haven't I already explained it that the Fed would print money for the FDIC after Congress would pass a corresponding act in case there is a need for such a legislation? Where did you get that the FDIC would be borrowing from the public? Please show me that part. Debts incur losses (if not paid indeed), they are just the two sides of the same coin. And if loss refers to income (according to your words), what the heck you began talking about losses when we were talking about debts?

If it comes down from it the FDIC would need to borrow money from the government via it's line of credit at the Treasury. Since the government is run "by the people and for the people" and since the public pays taxes to the government, the FDIC would essentially be borrowing from the public.

So, in this case, the losses incurred from the uncollectible debts (bank defaults) will be paid by ordinary people directly. Now try to explain this to that guy who is ready to admit that I can't understand his explanations, but who still tries to make me explain to him how socializing debts (losses) works.

[twiifm]

Did you forget about your own claims dude? I was not talking about privatizing profits, which you obviously failed to see, but was talking about just one particular example of socializing losses, i.e. socializing bank debts. Nevertheless, I'm pleased that you finally looked at what Google says about this notion.

Your claim was that if FDIC fund was insufficient the Fed would print money to lend them.  This is already not true.  Credit comes from the Treasury who can not expand money supply

Even IF this was true, then its the FED that holds the debt not the public.  

IF the FDIC is borrowing from the public then the public is holding debt making it an asset for the public (not a liability).  

Debts & losses  are not same things.  Loss refers to income.  Debt refers to asset / liability.  You can't use these terms interchangeably unless you don't understand accounting

Please, if you have a point then explain yourself instead of giving straw men  

Haven't I already explained it that the Fed would print money for the FDIC after Congress would pass a corresponding act in case there is a need for such a legislation? Where did you get that the FDIC would be borrowing from the public? Please show me that part. Debts incur losses (if not paid indeed), they are just the two sides of the same coin. And if loss refers to income (according to your words), what the heck you began talking about losses when we were talking about debts?

If it comes down from it the FDIC would need to borrow money from the government via it's line of credit at the Treasury. Since the government is run "by the people and for the people" and since the public pays taxes to the government, the FDIC would essentially be borrowing from the public.

So, in this case, the losses incurred from the uncollectible debts (bank defaults) will be paid by ordinary people directly. Now try to explain this to that guy who is ready to admit that I can't understand his explanations, but who still tries to make me explain to him how socializing debts (losses) works.

Dude,  can you think logically for a second and stop being argumentative ?  If you run a business and you needed an extra $1M.  You borrowed $1M from your mom.   Does it mean the debt is passed to your mom?   You think this means your mom paid the debt?

If FDIC borrows money from Treasury,  then FDIC is debtor.   Treasury/ creditor gets interest payments.

You're just reaching now.   FDIC doesn't cover defaults.   They insure deposits.   Just forget your political bias and do some research.   Sheesh

[tee-rex]

Haven't I already explained it that the Fed would print money for the FDIC after Congress would pass a corresponding act in case there is a need for such a legislation? Where did you get that the FDIC would be borrowing from the public? Please show me that part. Debts incur losses (if not paid indeed), they are just the two sides of the same coin. And if loss refers to income (according to your words), what the heck you began talking about losses when we were talking about debts?

If it comes down from it the FDIC would need to borrow money from the government via it's line of credit at the Treasury. Since the government is run "by the people and for the people" and since the public pays taxes to the government, the FDIC would essentially be borrowing from the public.

So, in this case, the losses incurred from the uncollectible debts (bank defaults) will be paid by ordinary people directly. Now try to explain this to that guy who is ready to admit that I can't understand his explanations, but who still tries to make me explain to him how socializing debts (losses) works.

Dude,  can you think logically for a second and stop being argumentative ?  If you run a business and you needed an extra $1M.  You borrowed $1M from your mom.   Does it mean the debt is passed to your mom?   You think this means your mom paid the debt?

The debt is on me (bank), and if I'm not able to return the debt (deposit), it will be passed to a guarantor on the debt (FDIC). If this guarantor is a state and can't pay the debt, it can either default or print more money (Fed), thus indirectly (I hope I won't have to repeat this again) passing the debt on to the taxpayers (US citizens). I see no logic at all in what you say or ask. You could just as well bumble something incoherent with a clever face.

[twiifm]

Haven't I already explained it that the Fed would print money for the FDIC after Congress would pass a corresponding act in case there is a need for such a legislation? Where did you get that the FDIC would be borrowing from the public? Please show me that part. Debts incur losses (if not paid indeed), they are just the two sides of the same coin. And if loss refers to income (according to your words), what the heck you began talking about losses when we were talking about debts?

If it comes down from it the FDIC would need to borrow money from the government via it's line of credit at the Treasury. Since the government is run "by the people and for the people" and since the public pays taxes to the government, the FDIC would essentially be borrowing from the public.

So, in this case, the losses incurred from the uncollectible debts (bank defaults) will be paid by ordinary people directly. Now try to explain this to that guy who is ready to admit that I can't understand his explanations, but who still tries to make me explain to him how socializing debts (losses) works.

Dude,  can you think logically for a second and stop being argumentative ?  If you run a business and you needed an extra $1M.  You borrowed $1M from your mom.   Does it mean the debt is passed to your mom?   You think this means your mom paid the debt?

The debt is on me (bank), and if I'm not able to return the debt (deposit), it will be passed to a guarantor on the debt (FDIC). If this guarantor is a state and can't pay the debt, it can either default or print more money (Fed), thus indirectly (I hope I won't have to repeat this again) passing the debt on to the taxpayers (US citizens). I see no logic at all in what you say or ask. You could just as well bumble something incoherent with a clever face.

In this scenario you still are the debtor.  What you don't seem to grasp is that the money is loaned not given for free

There's no FED printing money either for FDIC.  That's something you made up