GTA
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September 05, 2014, 01:41:57 PM |
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This article is not written by "Forbes." It is written by Eric Mu. Eric Mu doesn't get it.
True enough. But unfortunately, the vast majority of people will only think: "I read on Forbes about Bitcoin, and they said..." It seems that Mr. Mu has written several Bitcoin articles for Forbes. Perhaps if Forbes were to get enough complaints about Mr. Mu's obvious ignorance of the fundamentals of Bitcoin, these articles would cease. Eric Mu doesn't get grammar, either. How could anyone take this article seriously? I'm surprised Forbes let this op-ed run.
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Summer,69
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September 05, 2014, 02:13:02 PM |
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Not sure if trolling or just really stupid
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X7
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September 05, 2014, 03:44:15 PM |
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this... *scratches head* ![](https://ip.bitcointalk.org/?u=http%3A%2F%2Fwww.troll.me%2Fimages%2Ffuturama-fry%2Fnot-sure-if-trolling-or-plain-stupidity.jpg&t=665&c=v3HRDYQM8KARzA)
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For what shall it profit a man, if he shall gain the world, and lose his own soul?
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MoonTime
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September 05, 2014, 04:00:28 PM |
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The current bitcoin system works very well. However I do agree. This will prevent some long term inflation like it happened in year 2014.
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BurtW
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September 05, 2014, 10:35:46 PM |
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There are two possibilities when it comes to Bitcoin banking, fractional reserve and central banking:
1) People in general never accept Bitcoin substitues as money. In otherwords, people want to have and to hold real Bitcoins in their hot little hands and do not use and accept Bitcoin IOUs as money (notes representing a future claim on an amount of BTC held on an account somewhere).
In this scenario:
Bitcoin banking is relegated to "Bitcoin warehousing" Fractional reserve banking is somewhat limited Central banking (central control of the number of Bitcoin notes in circulation) is not really needed
2) People in general do accept Bitcoin substitues as money. In otherwords, people do not really care if they have and hold real Bitcoins, they accept Bitcoin notes to be as good as or almost as good as the real thing and they accept Bitcoin IOUs as money.
In this scenario:
Bitcoin banking can develop and grow Fractional reserve banking can develop and grow Central banking (central control of the number of Bitcoin notes in circulation) would probably be necessary to limit and control the fractional reserve Bitcoin banks - keep them from printing too many Bitcoin notes
Note that even in scenario #2 you personally can decide to not participate in the Bitcoin substitute market and demand and use only the real thing so even if a vast market in Bitcoin substitutes develops you personally do not have to participate in it.
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Our family was terrorized by Homeland Security. Read all about it here: http://www.jmwagner.com/ and http://www.burtw.com/ Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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arxwn
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September 05, 2014, 10:53:11 PM |
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There are two possibilities when it comes to Bitcoin banking, fractional reserve and central banking:
1) People in general never accept Bitcoin substitues as money. In otherwords, people want to have and to hold real Bitcoins in their hot little hands and do not use and accept Bitcoin IOUs as money (notes representing a future claim on an amount of BTC held on an account somewhere).
In this scenario:
Bitcoin banking is relegated to "Bitcoin warehousing" Fractional reserve banking is somewhat limited Central banking (central control of the number of Bitcoin notes in circulation) is not really needed
2) People in general do accept Bitcoin substitues as money. In otherwords, people do not really care if they have and hold real Bitcoins, they accept Bitcoin notes to be as good as or almost as good as the real thing and they accept Bitcoin IOUs as money.
In this scenario:
Bitcoin banking can develop and grow Fractional reserve banking can develop and grow Central banking (central control of the number of Bitcoin notes in circulation) would probably be necessary to limit and control the fractional reserve Bitcoin banks - keep them from printing too many Bitcoin notes
Note that even in scenario #2 you personally can decide to not participate in the Bitcoin substitute market and demand and use only the real thing so even if a vast market in Bitcoin substitutes develops you personally do not have to participate in it.
Yes being forced to participate in a ponzi and deciding by yourself is the greatest distinction that is being missed in the current system. I dont know what an informed audience with a choice would do but personally having being subjected to a bail in I would go for the hot bitcoins in my pocket.
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odolvlobo
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September 05, 2014, 11:09:52 PM |
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... 2) People in general do accept Bitcoin substitues as money. In otherwords, people do not really care if they have and hold real Bitcoins, they accept Bitcoin notes to be as good as or almost as good as the real thing and they accept Bitcoin IOUs as money.
You don't need "Bitcoin notes" or "Bitcoin IOUs" to have FRB. That seems to be a big misconception. You deposit your bitcoins at Coinbase and they loan them out. That's all it takes.
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countryfree
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September 05, 2014, 11:14:18 PM |
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I've always been against anything centralized, BTC central bank or BTC country. Neither is needed but more transparency could help. MyGox's failure was a surprise to most onlookers because they had no idea on how that company was managing its daily business. Had they been aware that the company was doing some risky business, they would have moved their bitcoins elsewhere.
Self-regulation can be as effective as a central bank is properly implemented.
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I used to be a citizen and a taxpayer. Those days are long gone.
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BurtW
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September 05, 2014, 11:31:28 PM |
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... 2) People in general do accept Bitcoin substitues as money. In otherwords, people do not really care if they have and hold real Bitcoins, they accept Bitcoin notes to be as good as or almost as good as the real thing and they accept Bitcoin IOUs as money.
You don't need "Bitcoin notes" or "Bitcoin IOUs" to have FRB. That seems to be a big misconception. You deposit your bitcoins at Coinbase and they loan them out. That's all it takes. I agree that is why I said: Fractional reserve banking is somewhat limited
It is limited by the population/market demanding the real thing. If there is not a large market for IOUs including deposits of Bitcoins or only a small market for that sort of thing then Coinbase, Mt.Gox ![Wink](https://bitcointalk.org/Smileys/default/wink.gif) , etc. can only lend out so much of the real thing. They are physically limited by the general mistrust for Bitcoin IOUs. For the FRB to really take off and get out of control you need the general population to accept and use Bitcoin IOUs as money. My main point with respect to this thread is that unless/until that happens central control of Bitcoin banking is not needed.
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Our family was terrorized by Homeland Security. Read all about it here: http://www.jmwagner.com/ and http://www.burtw.com/ Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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odolvlobo
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September 05, 2014, 11:40:26 PM |
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... 2) People in general do accept Bitcoin substitues as money. In otherwords, people do not really care if they have and hold real Bitcoins, they accept Bitcoin notes to be as good as or almost as good as the real thing and they accept Bitcoin IOUs as money.
You don't need "Bitcoin notes" or "Bitcoin IOUs" to have FRB. That seems to be a big misconception. You deposit your bitcoins at Coinbase and they loan them out. That's all it takes. I agree that is why I said: Fractional reserve banking is somewhat limited
It is limited by the population/market demanding the real thing. If there is not a large market for IOUs including deposits of Bitcoins or only a small market for that sort of thing then Coinbase, Mt.Gox ![Wink](https://bitcointalk.org/Smileys/default/wink.gif) , etc. can only lend out so much of the real thing. They are physically limited by the general mistrust for Bitcoin IOUs. For the FRB to really take off and get out of control you need the general population to accept and use Bitcoin IOUs as money. My main point with respect to this thread is that unless/until that happens central control of Bitcoin banking is not needed. I don't know what you mean by "Bitcoin IOUs", but I believe that Bitcoin FRB is a certainty if Bitcoin becomes widely adopted. People will want loans, and banks will pay interest to depositors, and then loan out their money (assuming it is all legal).
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BurtW
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September 05, 2014, 11:54:38 PM |
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I don't know what you mean by "Bitcoin IOUs", but I believe that Bitcoin FRB is a certainty if Bitcoin becomes widely adopted. People will want loans, and banks will pay interest to depositors, and then loan out their money (assuming it is all legal).
Any time you do not personally control the private key you are accepting a "Bitcoin IOU" because you have deposited the BTC with someone else and they now owe you the BTC - and they control the private key. Examples: Coinbase, Localbitcoins, any Bitcoin bank in the future. By making a deposit you have accepted a Bitcoin IOU for your Bitcoins. Now they can lend them out, FRB is born. For FRB to really get going people need to accept paper bills or checks or wire transfers or deposit acounts as Bitcoins - which they are not. They are "Bitcoin IOUs" or transfers of "Bitcoin IOUs". I also agree with you that it is certain to happen because people in general are scared to carry and possibly lose their cash/Bitcoins so they will "leave that to professionals" - certain, just a matter of time and wider adoption.
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Our family was terrorized by Homeland Security. Read all about it here: http://www.jmwagner.com/ and http://www.burtw.com/ Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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LiberyOrDeath
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September 06, 2014, 03:03:11 AM |
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It is no secret that today, almost all modern banks operate on the basis of fractional reserves. To put in simpler terms: banks only has in their vaults a small percentage of the money that their customers gave them; if a large enough number of customers of a specific bank want to get their money back, the bank wouldn’t be able to meet the demand. Before there was modern central bank system, the bank could either have to borrow or file for bankruptcy. The central banks by design had infinite ability to lend, for they can legally conjure up money from thin air – there is a reason that modern currencies are called fiat money. ...... .... http://www.forbes.com/sites/ericxlmu/2014/08/24/why-there-should-be-a-bitcoin-central-bank/The real essence behind the idea of bitcoin and cryptocurrencies is DECENTRALIZATION. What you are saying about the benefits of fractional reserve banking is pure nonsense. Fractional reserve banking is thievery and slavery. BTC is freedom.
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polunna
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September 06, 2014, 10:42:57 AM |
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The beauty about Bitcoin is that people could choose something retarded like this, but they don't have to.
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bambino
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September 06, 2014, 11:06:07 AM |
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The beauty about Bitcoin is that people could choose something retarded like this, but they don't have to.
Agreed. I cannot believe so many "free market" people are against this idea. If this is what consumers want, someone should provide it, for a fee. More to the point, lending is important, especially when buying a house. Fractional reserves allows others to earn interest on their savings. Such a Bitcoin bank could still have proof of reserves, indicating how much money is being lent out vs. in reserve. With Bitcoin, it is purely optional whether you work with such an institution. This is less easy in our current financial system. Terminology may be bogging down a valid discussion. Central bank == insurance (as /u/PostOpticon pointed out) seems to be the crux of Mr. Mu's argument. I do agree the usage of "Central Bank" is inaccurate, but should not preclude a valid discussion.
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unexecuted
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September 06, 2014, 11:40:09 AM |
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Oh noes, we cannot borrow our way to prosperity!
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CoolBliss
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September 06, 2014, 11:55:47 AM |
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If there was a bitcoin central bank, all other bitcoin holders could have diluted the value of their own bitcoins in order to save a failing exchange. That way we could still have MT Gox. Perfect.
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Meuh6879
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September 06, 2014, 11:57:26 AM |
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The current bitcoin system works very well. However I do agree. This will prevent some long term inflation like it happened in year 2014.
+1
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arxwn
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September 06, 2014, 08:55:05 PM |
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I don't know what you mean by "Bitcoin IOUs", but I believe that Bitcoin FRB is a certainty if Bitcoin becomes widely adopted. People will want loans, and banks will pay interest to depositors, and then loan out their money (assuming it is all legal).
Any time you do not personally control the private key you are accepting a "Bitcoin IOU" because you have deposited the BTC with someone else and they now owe you the BTC - and they control the private key. Examples: Coinbase, Localbitcoins, any Bitcoin bank in the future. By making a deposit you have accepted a Bitcoin IOU for your Bitcoins. Now they can lend them out, FRB is born. For FRB to really get going people need to accept paper bills or checks or wire transfers or deposit acounts as Bitcoins - which they are not. They are "Bitcoin IOUs" or transfers of "Bitcoin IOUs". I also agree with you that it is certain to happen because people in general are scared to carry and possibly lose their cash/Bitcoins so they will "leave that to professionals" - certain, just a matter of time and wider adoption. True, plus any time you buy credit on any bitcoin store. Whereas I can understand that you can have better management of your own business you effectively ommit the trustless part.
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arxwn
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September 06, 2014, 08:56:30 PM |
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The beauty about Bitcoin is that people could choose something retarded like this, but they don't have to.
Agreed. I cannot believe so many "free market" people are against this idea. If this is what consumers want, someone should provide it, for a fee. More to the point, lending is important, especially when buying a house. Fractional reserves allows others to earn interest on their savings. Such a Bitcoin bank could still have proof of reserves, indicating how much money is being lent out vs. in reserve. With Bitcoin, it is purely optional whether you work with such an institution. This is less easy in our current financial system. Terminology may be bogging down a valid discussion. Central bank == insurance (as /u/PostOpticon pointed out) seems to be the crux of Mr. Mu's argument. I do agree the usage of "Central Bank" is inaccurate, but should not preclude a valid discussion. Isn't the runaway ponzi scans kind of fbr without the bells and whistles ?
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leopard2
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September 06, 2014, 09:27:59 PM |
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Paper bitcoin ... just what the world needs. ![Roll Eyes](https://bitcointalk.org/Smileys/default/rolleyes.gif) Central banks are the problem not the solution ... Hey, there was a central bank, called MtGox, they used fractional banking all the time, yay!! ![Tongue](https://bitcointalk.org/Smileys/default/tongue.gif) Hmmm, wasnt the issue just that? That Gox had less than 100% reserves? How can that be a good thing?!? That article must have been written under Crystal Meth. ![Cheesy](https://bitcointalk.org/Smileys/default/cheesy.gif)
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Truth is the new hatespeech.
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