2012-05-14 EtsyLabs/KennethBromberg - Bitcoin is NOT a Currency (video)

[julz]

"Bitcoin is NOT a Currency" at BK Tech Talks Meetup at Etsy Labs

2012-05-14

Speaker: Kenneth Bromberg, Lead Programmer, Bloomberg
http://www.youtube.com/watch?v=NULPfp0Zu5g

http://www.meetup.com/BK-Tech-Talks/events/55386052/

initial discussion thread here: https://bitcointalk.org/index.php?topic=81642.0

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[apetersson]

halfway through, not a ton of content about bitcoin so far but very funny and interesting talk.

[hazek]

BK Tech Talks - Bitcoin is NOT a currency
http://www.youtube.com/watch?v=NULPfp0Zu5g

What a waste of time that was.

Ty, I was 2min in and paused reading this thread. I closed the tab now.

Curiosity got the best of me and I'm actually glad. The video is quite decent and his points have a lot of merit and I suggest people to at least listen to this presentation. Of course he is completely oblivious to the invisible regulations by strictly market consumers (i.e. the free market) and wrongly thinks we must have governmental regulatory tools to avoid volatility which is a shame since I got the feeling he is pretty intelligent.

Wow 54:40 guy presents a beautiful counterargument to Kenneth Bromberg's argument that Bitcoin is not a currency because it doesn't have sufficient future value guarantees to which he doesn't have an answer for.

[proudhon]

BK Tech Talks - Bitcoin is NOT a currency
http://www.youtube.com/watch?v=NULPfp0Zu5g

What a waste of time that was.

Ty, I was 2min in and paused reading this thread. I closed the tab now.

Curiosity got the best of me and I'm actually glad. The video is quite decent and his points have a lot of merit and I suggest people to at least listen to this presentation. Of course he is completely oblivious to the invisible regulations by strictly market consumers (i.e. the free market) and wrongly thinks we must have governmental regulatory tools to avoid volatility which is a shame since I got the feeling he is pretty intelligent.

Wow 54:40 guy presents a beautiful counterargument to Kenneth Bromberg's argument that Bitcoin is not a currency because it doesn't have sufficient future value guarantees to which he doesn't have an answer for.

The thing I love most about this video is that people are having very deep and philosophical conversations about something that didn't even exist 4 years ago.

[Dalkore]

This video is very important.   He really underlines the risks of bitcoin and why is will have trouble really becoming mainstream.  The serious thinkers and supporters of the Bitcoin project should watch this video (I have twice) and contemplate what he is saying.  I used to work in the ACH department of a major bank (top 5) and he is correct on the point that having that centralized control gives you "a lot" of power.   I handled mainly Vegas casinos and state lotteries and you wouldn't believe how much money I would transfer on a daily basis.  

If we are really honest in our support of this system as a way to lower transaction costs and provide a true alternative.  We will need to start looking at self-regulation and paying our taxes proactively to show we are serious in being a viable member of the financial community.   Sure, I would love to think we will just be allowed to grow and continue to be un-regulated but in reality, that is not the case.  What we can control is what we do as a community to help shape this upcoming regulations so we can still innovate.  

If you are in the camp where you think, "f*** that, money is mine and I can do whatever pleases me", then you are going to wake-up to a reality sooner than later and then you will have to make the personal decision if you want to still participate in the market will surely will become more underground unless we step up and start dealing with the major issues on why Bitcoin will have hardcore rules made against it with stiff penalties to boot.   I have some ideas I want to explore.


Thoughts?  Please bring your friends on here into this post and lets get a discussion going, we need it.


Dalkore

[proudhon]

This video is very important.   He really underlines the risks of bitcoin and why is will have trouble really becoming mainstream.  The serious thinkers and supporters of the Bitcoin project should watch this video (I have twice) and contempt what he is saying.  I used to work in the ACH department of a major bank (top 5) and he is correct on the point that having that centralized control gives you "a lot" of power.   I handled mainly Vegas casinos and state lotteries and you wouldn't believe how much money I would transfer on a daily basis.  

If we are really honest in our support of this system as a way to lower transaction costs and provide a true alternative.  We will need to start looking at self-regulation and paying our taxes proactively to show we are serious in being a viable member of the financial community.   Sure, I would love to think we will just be allowed to grow and continue to be un-regulated but in reality, that is not the case.  What we can control is what we do as a community to help shape this upcoming regulations so we can still innovate.  

If you are in the camp where you think, "f*** that, money is mine and I can do whatever pleases me", then you are going to wake-up to a reality sooner than later and then you will have to make the personal decision if you want to still participate in the market will surely will become more underground unless we step up and start dealing with the major issues on why Bitcoin will have hardcore rules made against it with stiff penalties to boot.   I have some ideas I want to explore.


Thoughts?  Please bring your friends on here into this post and lets get a discussion going, we need it.


Dalkore

I agree that self-regulation would be, in the long run, a good thing.  Not really sure where to go with that thought.  The first thing that comes to mind, really, is security standards.

[justusranvier]

This video is very important.   He really underlines the risks of bitcoin and why is will have trouble really becoming mainstream.  The serious thinkers and supporters of the Bitcoin project should watch this video (I have twice) and contempt what he is saying.  I used to work in the ACH department of a major bank (top 5) and he is correct on the point that having that centralized control gives you "a lot" of power.   I handled mainly Vegas casinos and state lotteries and you wouldn't believe how much money I would transfer on a daily basis.

I'm not sure that philosophical misgivings are as important as you think. According to MemoryDealers, Chinese exporters are starting to express interest in using Bitcoins to accept payment for their products. If the producers of products people want to import start demanding Bitcoins then those customers will start using Bitcoins to pay for those products.

[Dalkore]

This video is very important.   He really underlines the risks of bitcoin and why is will have trouble really becoming mainstream.  The serious thinkers and supporters of the Bitcoin project should watch this video (I have twice) and contempt what he is saying.  I used to work in the ACH department of a major bank (top 5) and he is correct on the point that having that centralized control gives you "a lot" of power.   I handled mainly Vegas casinos and state lotteries and you wouldn't believe how much money I would transfer on a daily basis.

I'm not sure that philosophical misgivings are as important as you think. According to MemoryDealers, Chinese exporters are starting to express interest in using Bitcoins to accept payment for their products. If the producers of products people want to import start demanding Bitcoins then those customers will start using Bitcoins to pay for those products.

When is comes to money and how it is controlled and who controls is, philosophy and ideology are all the matters.   The powers that be "will" have something to say about this and it will determine if this is an above ground, underground or some sort of grey area in the future.   The more we are proactive on accepting this and doing something, the better the future will be in the long run.

The argument you give is part of the standard personal liberty argument.  The is fine and dandy and I personally have sympathies in that manner after being a serious student of history.  BUT, that doesn't matter when your not the one making the rules we are to play by and the rule-makers have enforcement power as well.   Don't think standing strong and being brave means no one will get run over.  We need to be smart and work together to get a solution at least a large majority of us is willing to accept.  I think about this on a daily basis when it comes to Bitcoins future.

P.S.  If anyone would like to discuss this in a more private manner, please contact me and we will set something up.


Dalkore

[justusranvier]

BUT, that doesn't matter when your not the one making the rules we are to play by and the rule-makers have enforcement power as well.

This is true at the moment but I don't expect it to last very much longer.

The behavior of the political class in the last few years very much resembles the frantic looting of the public purse that happened in the former Soviet Union just prior to its collapse.

Western governments are far beyond the point of no return when it comes to fiscal sustainability. The current generation of federal workers in the US, for example, will never receive the pension benefits they were promised, which guarantees there won't be another generation following them as part of the current system.

Regulatory difficulties are a temporary problem at best because before Bitcoin becomes large enough to attract serious enforcement attention the implosion of the public sector may be too far along for them to do anything about it.

[Dalkore]

BUT, that doesn't matter when your not the one making the rules we are to play by and the rule-makers have enforcement power as well.

This is true at the moment but I don't expect it to last very much longer.

The behavior of the political class in the last few years very much resembles the frantic looting of the public purse that happened in the former Soviet Union just prior to its collapse.

Western governments are far beyond the point of no return when it comes to fiscal sustainability. The current generation of federal workers in the US, for example, will never receive the pension benefits they were promised, which guarantees there won't be another generation following them as part of the current system.

Regulatory difficulties are a temporary problem at best because before Bitcoin becomes large enough to attract serious enforcement attention the implosion of the public sector may be too far along for them to do anything about it.

Even if this was the case (certainly there are signs supporting this), I would see this area as something they would come after Bitcoin and other alternatives with force.  This is really powerful stuff we are trying to make work here and because of its highly disruptive nature to the existing power-base, we need to be smarter than most.  I see too much bravado on this issue in here to give me any comfort.   I support this movement like you don't know, if you saw my reading list, you would understand. 

Dalkore

[justusranvier]

This is really powerful stuff we are trying to make work here and because of its highly disruptive nature to the existing power-base, we need to be smarter than most.

It's disruptive to the existing power base but at this point in time that power base is imploding due to inevitable mathematical realities that have nothing to do with Bitcoin.

If we see the apparatchik taking notice of Bitcoin at this stage it will probably be in the form of them looking for a way to convert their ill-gotten gains into something that will last beyond the existence of the current paradigm.

[lonelyminer (Peter Šurda)]

Even if this was the case (certainly there are signs supporting this), I would see this area as something they would come after Bitcoin and other alternatives with force.  This is really powerful stuff we are trying to make work here and because of its highly disruptive nature to the existing power-base, we need to be smarter than most.  I see too much bravado on this issue in here to give me any comfort.   I support this movement like you don't know, if you saw my reading list, you would understand. 

Even if you were right in all your points, the only conclusion to draw from this would be that Bitcoin is pointless. If it cannot withstand the state, there is no reason to use it. Taxation will allow the state to sustain itself, and regulation could eliminate the transaction cost advantage Bitcoin has. Bitcoin would cease to exist. So even the hardcore pragmatic can readily conclude that an attempt to legitimise Bitcoin in the eye of the state is self-defeating. There is even a certain level of naivite in believing that lobbying protects you from the state. The target of lobbying is not the state, but your competitors.

The most rational approach, in my opinion, is to maintain the current "not illegal" status and stall regulation attempts until the fiat money collapses.

[proudhon]

Even if this was the case (certainly there are signs supporting this), I would see this area as something they would come after Bitcoin and other alternatives with force.  This is really powerful stuff we are trying to make work here and because of its highly disruptive nature to the existing power-base, we need to be smarter than most.  I see too much bravado on this issue in here to give me any comfort.   I support this movement like you don't know, if you saw my reading list, you would understand. 

Even if you were right in all your points, the only conclusion to draw from this would be that Bitcoin is pointless. If it cannot withstand the state, there is no reason to use it. Taxation will allow the state to sustain itself, and regulation could eliminate the transaction cost advantage Bitcoin has. Bitcoin would cease to exist. So even the hardcore pragmatic can readily conclude that an attempt to legitimise Bitcoin in the eye of the state is self-defeating. There is even a certain level of naivite in believing that lobbying protects you from the state. The target of lobbying is not the state, but your competitors.

The most rational approach, in my opinion, is to maintain the current "not illegal" status and stall regulation attempts until the fiat money collapses.

The collapse of fiat, if it ever occurs, is likely quite a ways off.  Far enough the government imposed regulation is a threat worth taking seriously.  So, I think there's some merit to Dalkore's suggestion at proactively heading it off.

[Dalkore]

You have to remember that is in its essence is a political movement and much as its a commercial movement to bring power back to individuals.   

With that said, you need to have a intellectual group in this movement to help give guidance and work through issues that will come up at some point.

Case & Point: Occupy movement, it was doomed to fail because it was a movement with attributes that doomed it.   1.)  A leadership-less movement, no consensus, no real goal to achieve, means there is no endgame place.   2.)   No real straightforward message, it was a movement that had no single purpose so that is could be anything to anyone, this means in effect it was nothing to no one.   They had many low hanging fruit they could of went after to build credibility and that would increase exposure and in the end, give them more political power to affect change.

We need attainable goals politically as well, ones that we generally agree on.   Something we repeat to all media so it is to give us a consistent message.   Almost daily I read more "hit" stories on Bitcoin about all the bad things it is or can be used for.  If we don't stand up and say, yes that can happens in dollars and bitcoins but that is not what or why we do this, we will just be branded that way and that makes it all the easier to bring draconian regulation against this growing movement.


Thoughts?
Dalkore

[proudhon]

You have to remember that is in its essence is a political movement and much as its a commercial movement to bring power back to individuals.   

With that said, you need to have a intellectual group in this movement to help give guidance and work through issues that will come up at some point.

Case & Point: Occupy movement, it was doomed to fail because it was a movement with attributes that doomed it.   1.)  A leadership-less movement, no consensus, no real goal to achieve, means there is no endgame place.   2.)   No real straightforward message, it was a movement that had no single purpose so that is could be anything to anyone, this means in effect it was nothing to no one.   They had many low hanging fruit they could of went after to build credibility and that would increase exposure and in the end, give them more political power to affect change.

We need attainable goals politically as well, ones that we generally agree on.   Something we repeat to all media so it is to give us a consistent message.   Almost daily I read more "hit" stories on Bitcoin about all the bad things it is or can be used for.  If we don't stand up and say, yes that can happens in dollars and bitcoins but that is not what or why we do this, we will just be branded that way and that makes it all the easier to bring draconian regulation against this growing movement.


Thoughts?
Dalkore

Do you have any attainable political goals in mind?

[Dalkore]

@proudhon

Well one of the biggest and vaild complaint Mr. Bromberg had is that there is no floor under Bitcoin which institutional investors can depend on so they could make long-term investments in Bitcoin.


Idea:   I think we should think about creating an actually Bitcoin Bank that would use part of its capital to actually back the Bitcoins they hold.   I was thinking Miners could donate 1% of their BTC income to help get it stated.   I would actually purchase gold bullion and store them and have the backing the bitcoins in the bank's digital vault.  As these deposits increase, we would use traditional vetting processes to assure that these bitcoins are not being used for any illegal transactions.   Making a chain of custody would go a long ways.  What is nice is this would be a central institute that could operate but not take away from the anonymous nature of Bitcoin.


Thoughts?
D     

[justusranvier]

Well one of the biggest and vaild complaint Mr. Bromberg had is that there is no floor under Bitcoin which institutional investors can depend on so they could make long-term investments in Bitcoin.

Good. Bitcoin will be a far better tool for people who want to use it to facilitate the sale of products and services if institutional investors and other speculators stay away from it.

Bitcoin allows a company that delivers services over the internet to accept payments from any country in the world with no risk of fraud or chargebacks. If they use a service like Bitpay the merchant doesn't even need to worry about exchange rate fluctuations - he never sees the Bitcoins himself, just local currency deposited into his bank account. Bitcoin is just a tool that allows him to expand the market he is able to sell into to include countries which the traditional financial sector does not serve. Ultimately the commerce good and services that people want is what's important in the economy. It's up to the legacy financial sector to figure out how to add value to that or else become obsolete.

If the institutional investors want to get involved they should invest in individual companies that have a solid business plan and a good product/service, just like any other sound investment instead of just buying up currency.

[proudhon]

@proudhon

Well one of the biggest and vaild complaint Mr. Bromberg had is that there is no floor under Bitcoin which institutional investors can depend on so they could make long-term investments in Bitcoin.

Yeah, It's difficult for me to pinpoint exactly how I feel about this complaint.  On the one hand, I understand it, and I think it's a real puzzler how large institutional investors will ever get involved given that there is no floor under bitcoin, as you put it.  But, at the same time, I want to respond by saying, yes, that's right, there is no floor, no ultimate support...other than the support of those using bitcoin.

Now, is that enough to satisfy institutional investors?  I really can't say.  Probably not.  But the sense I'm getting about this project now is that there's a good chance that, by and by, the strength of the support of bitcoins users will be sufficient to satisfy the demands of such investors.  I suspect it will take a while for this trust to emerge, but I think there's a decent enough chance that it does emerge in a very organic way.  And like biological grown, once a certain base has been achieved, growth beyond that can happen surprisingly quickly.  So, there's a part of me that's resistant to even trying to prop bitcoin up in the way you describe, and instead I'm hopeful that the project sort of organizes and shapes itself out of chaos.  But, maybe that's far too idealistic a thought, which, I think, is something you're wanting to address.

[Dalkore]

Ultimately, you don't need them.  But having smart money invested and talking positive about Bitcoins, makes it more accepted and harder for real hardcore regulation.  We really to take the reputation of BTC very serious or it is going to continue to get this label of unsuitability.   Once you can label something negatively, it makes it easier to conquer because the average person won't give a care when they try to hamper operations. 

You have to realize what direction the wind is blowing and that direction is more tracking and control.  This is in exact contradiction of this policy.   


Dalkore 

[justusranvier]

Ultimately, you don't need them.  But having smart money invested and talking positive about Bitcoins, makes it more accepted and harder for real hardcore regulation.  We really to take the reputation of BTC very serious or it is going to continue to get this label of unsuitability.   Once you can label something negatively, it makes it easier to conquer because the average person won't give a care when they try to hamper operations. 

You have to realize what direction the wind is blowing and that direction is more tracking and control.  This is in exact contradiction of this policy. 

I agree that the wind in blowing that way in the developed countries but I don't think it has the same implications you do. First of all as the developed countries enact more strict capital controls it makes the use of Bitcoin more economically advantageous. Secondly most of the growth potential for Bitcoin use is in the developing world, where this kind of tracking and control doesn't exist. Clamping down in the US, for example, won't do anything to reduce Bitcoin's potential in Somalia or for Chinese-Russian trade.