alonelyorange (OP)
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May 18, 2011, 06:26:34 AM |
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I've only recently begun understanding Bitcoins and decided to ask my Economics professor about the viability of decentralized digital currency.
She responded by saying that it will not be sustained just as the Gold standard was replaced by the Dollar (in the US).
The Dollar is also backed by the Fed. and our confidence in it.
What are some future speculations? When it hits the cap, will BTC be replaced by a inflatable currency?
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Unlike traditional banking where clients have only a few account numbers, with Bitcoin people can create an unlimited number of accounts (addresses). This can be used to easily track payments, and it improves anonymity.
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benjamindees
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May 18, 2011, 07:43:54 AM |
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Did she offer any reasoning to back up her viewpoint?
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Civil Liberty Through Complex Mathematics
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MoonShadow
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May 18, 2011, 07:44:06 AM |
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I've only recently begun understanding Bitcoins and decided to ask my Economics professor about the viability of decentralized digital currency.
She responded by saying that it will not be sustained just as the Gold standard was replaced by the Dollar (in the US).
The Dollar is also backed by the Fed. and our confidence in it.
What are some future speculations? When it hits the cap, will BTC be replaced by a inflatable currency?
You might want to consider another path towards an economics education. |
"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."
- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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MoonShadow
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May 18, 2011, 07:44:59 AM |
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Did she offer any reasoning to back up her viewpoint?
Hell, for that matter did she bother to even look at the fundamentals that underpin Bitcoin? |
"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."
- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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kiba
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May 18, 2011, 07:46:09 AM |
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Asking an economic professor about bitcoin, which they probably never ever research in their entire life is probably like asking Newton about black holes and Chaos. He would have no clues.
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caveden
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May 18, 2011, 07:52:58 AM |
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You might want to consider another path towards an economics education.
+1 |
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caveden
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May 18, 2011, 07:55:03 AM |
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Asking an economic professor about bitcoin, which they probably never ever research in their entire life is probably like asking Newton about black holes and Chaos. He would have no clues.
Comparing Newton to most economic professors of today - particularly one that thinks leaving the gold standard was necessary and good - is a major offense to the name of such a revolutionary scientist.  |
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joeydangerous
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May 18, 2011, 09:17:25 AM |
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Bitcoin won't be replaced by an inflatable currency, there's no way. If one comes along only fools will adopt it and it will collapse just like the dollar and other fiat currencies are currently doing. you might want to ask your prof. if she is teaching keynesian economics or Austrian economics. If it's keynesian economics you should probably take anything she says with a fistful of salt.
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caveden
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May 18, 2011, 09:20:46 AM |
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Unless - trying to be nice to your professor here - she meant that in the sense of "governments will outlaw this so they can keep inflating their currency on their favor". Then she might have a point, although I think it's not easy at all to outlaw something as bitcoin.
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barbarousrelic
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May 18, 2011, 03:52:28 PM |
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I see her point.
Let's say Bitcoin becomes as popular as the dollar. Banks start accepting it for deposits and making loans with it. At first you can cash out into your personal Bitcoin wallet.dat, but eventually banks start lending out Bitcoins from demand deposits. Bank runs occur. The US government institutes Federal Bitcoin Deposit Insurance and a Federal Bitcoin Reserve, institutionalizing fractional-reserve Bitcoin banking. Federal Bitcoin Reserve Notes are issued which are not redeemable in actual Bitcoins. And then we end up exactly where we are now.
The two solutions to this are
a) education about the problems of fractional reserve banking and the benefits of hard money
b) Making sure the default Bitcoin client is so useful that people don't feel the need to ever use banks in the first place.
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Do not waste your time debating whether Bitcoin can work. It does work.
"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.
There is no such thing as "market manipulation." There is only buying and selling.
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tomcollins
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May 18, 2011, 05:02:13 PM |
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I read somewhere that 90% or more of Economics professors get significant funding from the Fed. So of course they are in favor of centralized banking.
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MoonShadow
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May 18, 2011, 05:55:43 PM |
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I read somewhere that 90% or more of Economics professors get significant funding from the Fed. So of course they are in favor of centralized banking.
It's not that high, but the vast majority do get a significant portion of their income from public sources (governments or their agencies, such as the Fed) either directly (professor at a public university) or indirectly (speaking/consultation fees from such agencies). It's very difficult to get a person to understand something when her salary is dependent upon her not understanding it. |
"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."
- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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gigitrix
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May 18, 2011, 06:55:55 PM |
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No-one will migrate to an inflationary currency. It's simple game theory: I stick here and my relative purchasing power goes up, or I go over here and my purchasing power goes down. Humans are selfish, and bitcoin fortunately supports that while keeping things fair |
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barbarousrelic
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May 18, 2011, 07:10:47 PM |
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No-one will migrate to an inflationary currency. It's simple game theory: I stick here and my relative purchasing power goes up, or I go over here and my purchasing power goes down. Humans are selfish, and bitcoin fortunately supports that while keeping things fair You are assuming government never gets into the business of regulating the Bitcoin economy, as they did with the regular, formerly gold economy. |
Do not waste your time debating whether Bitcoin can work. It does work.
"Early adopters will profit" is not a sufficient condition to classify something as a pyramid or Ponzi scheme. If it was, Apple and Microsoft stock are Ponzi schemes.
There is no such thing as "market manipulation." There is only buying and selling.
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MacFall
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May 18, 2011, 07:23:12 PM |
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I see her point.
Let's say Bitcoin becomes as popular as the dollar. Banks start accepting it for deposits and making loans with it. At first you can cash out into your personal Bitcoin wallet.dat, but eventually banks start lending out Bitcoins from demand deposits. Bank runs occur. The US government institutes Federal Bitcoin Deposit Insurance and a Federal Bitcoin Reserve, institutionalizing fractional-reserve Bitcoin banking. Federal Bitcoin Reserve Notes are issued which are not redeemable in actual Bitcoins. And then we end up exactly where we are now.
The two solutions to this are
a) education about the problems of fractional reserve banking and the benefits of hard money
b) Making sure the default Bitcoin client is so useful that people don't feel the need to ever use banks in the first place.
Definitely this. A is more effective in the long term, but B is much easier to accomplish in the short. Either one will suffice. |
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MacFall
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May 18, 2011, 07:25:57 PM |
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No-one will migrate to an inflationary currency. It's simple game theory: I stick here and my relative purchasing power goes up, or I go over here and my purchasing power goes down. Humans are selfish, and bitcoin fortunately supports that while keeping things fair You are assuming government never gets into the business of regulating the Bitcoin economy, as they did with the regular, formerly gold economy. The regular, formerly gold economy was not consciously formed to resist the government's power over money. Bitcoin is being consciously developed to undo that power. That's quite an advantage. |
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NghtRppr
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May 18, 2011, 07:32:32 PM |
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I've only recently begun understanding Bitcoins and decided to ask my Economics professor about the viability of decentralized digital currency.
She responded by saying that it will not be sustained just as the Gold standard was replaced by the Dollar (in the US).
The Dollar is also backed by the Fed. and our confidence in it. It sounds like she's pissing Kool-Aid i.e. she drinks the Kool-Aid so deeply and so frequently that her urine is mostly Kool-Aid. |
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MoonShadow
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May 18, 2011, 07:35:00 PM |
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No-one will migrate to an inflationary currency. It's simple game theory: I stick here and my relative purchasing power goes up, or I go over here and my purchasing power goes down. Humans are selfish, and bitcoin fortunately supports that while keeping things fair You are assuming government never gets into the business of regulating the Bitcoin economy, as they did with the regular, formerly gold economy. This is a fair assumption, since there is precedent in the digital realm of distributed technologies being largely immune to the will of legistlators. |
"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."
- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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MacFall
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May 18, 2011, 07:54:03 PM |
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I've only recently begun understanding Bitcoins and decided to ask my Economics professor about the viability of decentralized digital currency.
She responded by saying that it will not be sustained just as the Gold standard was replaced by the Dollar (in the US).
The Dollar is also backed by the Fed. and our confidence in it. It sounds like she's pissing Kool-Aid i.e. she drinks the Kool-Aid so deeply and so frequently that her urine is mostly Kool-Aid. Intellectual kidney failure ahoy. |
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hazek
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May 18, 2011, 10:55:27 PM |
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I've only recently begun understanding Bitcoins and decided to ask my Economics professor about the viability of decentralized digital currency.
She responded by saying that it will not be sustained just as the Gold standard was replaced by the Dollar (in the US).
The Dollar is also backed by the Fed. and our confidence in it.
What are some future speculations? When it hits the cap, will BTC be replaced by a inflatable currency?
She failed to mention the gun that's used to "promote" the replacement of the gold standard with the dollar. And that the trust in the fed is actually fear of it's guns. And to answer your question you have to understand first why even today gold is money to many people but they aren't using it as money and what sort of properties of gold handicap it in that regard. The answer to why is of course the government guns enforcing the legal tender laws and capital gains taxes on precious metals. Of course gold is physical element which can be seized much easier then Bitcoin. Also it's much harder to hide it and trade it especially at long distances. There's all these barriers set up by the government guns that gold has a really big problem overcoming even if the market wanted to use it as money where Bitcoin could potentially have a much easier job. So if anything we are either going to move towards Bitcoins as money or we wont. But no one can know for sure what the markets and governments response will be to it and what will ultimately happen. I guarantee you this though: If BTC is replaced with an inflatable currency it wont be a voluntary market action but a forced government one. I'm 100% sure about that seeing as inflation is theft! |
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