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US clamps down on Bitcoin, fears lack of control

Discussion in 'Current Events' started by nikoloslvy, May 17, 2013.

  1. nikoloslvy

    nikoloslvy I wear my sunglasses at night...Anyone want fries?
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    I was always a fan even though I prefer gold.
     
  2. stevethrower

    stevethrower Got Sig?

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    Their accents are irritating...
     
  3. Norm Stansfield

    Norm Stansfield 私は亀が好きだ。

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    Same story, sans Putinist propaganda. Bitcoin dealings will be subject to the same draconian government supervision the rest of Americans' financial transactions are subject to.
    http://online.wsj.com/article/SB10001424127887323582904578485391717441224.html
     
  4. nikoloslvy

    nikoloslvy I wear my sunglasses at night...Anyone want fries?
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    Well I'm glad i didn't jump on that ship.
     
  5. JoeyDVDZ

    JoeyDVDZ That's MR. MOJO, Motherfucker!

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    What if America, as a whole, one day decided to trade something other than government sponsored and backed "money" for goods and services, like a more formalized version of the barter system? What would the US be able to do about it if the big companies decided they were willing to accept pelts to trade for food & goods, for instance? Something like that has to happen soon, because our monetary standard is tanking so bad that I doubt it can be saved.
     
  6. nikoloslvy

    nikoloslvy I wear my sunglasses at night...Anyone want fries?
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    It cant. The dollar will crash and burn.
     
  7. Norm Stansfield

    Norm Stansfield 私は亀が好きだ。

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    The options aren't "government money" and "a formalized version of the barter system". If you read up on the history of American capitalism, you'll find that money isn't a government invention.

    The alternative to government money and the Fed is private money (and private banking), most likely backed by precious metals. Not bartering. Bartering is so inefficient that most of the current US economy would be wiped out if it had to rely on it.

    And the reason why there is very little private money in America today is because private banking on a national level has been nationalized by the Federal Reserve Act of 1913, and is currently still banned.

    Private banking (and private currency) will become the alternative to the US dollar whenever that ban is lifted. If that happens, the dollar wouldn't even have to crash for some people to choose the alternative. Without the government enforcing a monopoly on money, the same thing would happen that always happens on a free market: competition. Different currencies would be issued and used, side by side.

    Some of these currencies would be backed by precious metals, others (like the bitcoin) would instead ensure scarcity through artificial means (which is even better, because the formula by which new bitcoins are created is perfectly predictable: gold mining isn't). But, unlike with the US dollar, there would be scarcity. No one would willingly choose a currency that the issuers can inflate at will, the way nations can inflate fiat currency at will.
     
    #7 Norm Stansfield, May 17, 2013
    Last edited: May 17, 2013
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  8. Neon

    Neon ネオン
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    In their defense, it really can be used to launder money on crazy scales. Besides, the money you have in the bank is FDIC insured. If some hacker steals your bitcoins you have no recourse. Also, it can be argued that digital money can never be fully fungible because all computer data is identical to other computer data anyway. And with real money, you can actually have a physical copy of all your assets in cash or gold/silver. Your bitcoins can disappear overnight because they don't actually exist in the physical world.
     
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  9. nikoloslvy

    nikoloslvy I wear my sunglasses at night...Anyone want fries?
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    It's the FDIC that causes banks to take unnecessary risks.
     
  10. Norm Stansfield

    Norm Stansfield 私は亀が好きだ。

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    1. It's true, bitcoins are a good way to get around the surveillance system the government has set up over Americans' finances - therefor criminals, who are more likely to not want to be under surveillance, are gonna use it. But that's not a reason to ban it.

    Instead, the surveillance system should be eliminated, and the government should get back to catching criminals by police work rather than through an Orwellian system that keeps an eye on everybody.

    2. Bitcoins are fungible (they can be exchanged for other types of money, just like any other currency). But I don't see what that has to do with them not being "real". If anything, the fact that they're not physical makes them easier to exchange. Your bank account is far less fungible than bitcoins. Just ask Cypriots how fungible their money was for almost a month in April this year.

    3. FDIC insurance works perfectly, right up until the minute it no longer does. When that happens, the consequences will be disastrous, for everyone involved with the US financial industry or dependent on the US government in any way (in other words, most of the US population). On the other hand, when the bitcoin system is compromised, the consequences are isolated. So long as individuals make sure to diversify their assets, they are far better protected by this property of Bitcoin than you and your bank account are by the FDIC.

    This is how you avoid becoming too big to fail. Not through ever increasing bailouts at taxpayers' expense.
     
  11. Neon

    Neon ネオン
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    I hate this argument because then every police work tactic is decried as Orwellian too.

    First off, I contend that for something to be fungible it must be tangible, or at least have the ability to exist in a tangible format. Every song you download from iTunes can be saved to a tangible media. bitcoin is one of those things that exists exclusively in the data world, which makes it problematic is a fungible currency.

    Second, you are comparing the wrong thing. Yes, your money in the bank is less fungible than bitcoins, but the CURRENCY ITSELF is not. The Cypriots who had their money in cash were unaffected by what happened. This isn't about comparing bitcoins to a bank. It's about comparing them to a dollar. There is no bitcoin certificate, so there is no option for you to have your bitcoins in a tangible form that can't be digitally siphoned out of your account.

    You have an awful lot of trust in the people who run bitcoin for someone who has so little trust in the people who run real world currency. Sure, let's let some random people run a privatized currency and simply trust that they won't just steal trillions of dollars.
     
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  12. nikoloslvy

    nikoloslvy I wear my sunglasses at night...Anyone want fries?
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    I saw this on youtube so im smat.FDIC cant cover shit.
     
  13. Neon

    Neon ネオン
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    None of this provides any credence to the pro-bitcoin argument. "The current currency isn't safe, so lets add another even more unsafe currency!"
     
  14. nikoloslvy

    nikoloslvy I wear my sunglasses at night...Anyone want fries?
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    I'm not making a pro bitcoin argument just an anti FDIC argument.I haven't made up my mind about bitcoin.
     
  15. Neon

    Neon ネオン
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    I haven't either, really. But it certainly scares me, and I haven't really heard any convincing arguments for it yet. I wouldn't say I am actively anti-bitcoin, though. Still just very hesitant.

    Do you know bitcoin uses many times more computational power than all the world's supercomputers put together? The top 500 supercomputers produce only 12% of the computational power of the bitcoin servers. That's pretty nuts.

    http://gizmodo.com/the-worlds-most-powerful-computer-network-is-being-was-504503726
     
  16. nikoloslvy

    nikoloslvy I wear my sunglasses at night...Anyone want fries?
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    From the outset it doesn't seem very secure. With groups like Anonymous out there god knows what havoc they can bring.That doesn't mean I think the state should crack down on it. If you want to keep Bitcoins instead of dollars and understand the risks have at it.I even think the liberty dollar should be allowed to compete with us currency. If you want a coin or mark that says there is gold in a vault that matches the amount on the bill or coin what do I care?

    I gotta find the Tom Woods clip where he interviews one of the pro Bitcoin ppl..hang on..

    Here we go.

     
  17. Norm Stansfield

    Norm Stansfield 私は亀が好きだ。

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    What do you mean? The surveillance of everyone under the pretext of catching criminals is Orwellian. Police work (the investigation of actual crimes) to catch criminals is not Orwellian.

    The distinction is pretty clear.
     
  18. Neon

    Neon ネオン
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    Please explain to me how exactly the government is supposed to do "police work" to find people laundering money on bitcoin. And I don't mean tens of millions. I mean tens of thousands. Or even just thousands. You don't think it will become a great way for lower income people to make tax free income? How exactly do you combat that?
     
  19. nikoloslvy

    nikoloslvy I wear my sunglasses at night...Anyone want fries?
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    Well if you had a flat national sales tax...just sayin.
     
  20. Neon

    Neon ネオン
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    Again, I don't disagree, but that isn't the reality.
     
  21. Don the Radio Guy

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    The Bitcoin market will crash on its own once hackers figure out how to mine them at a greater rate than should be. It's fake money without anyone backing it. Fiat currency only works with backing.

    If you want to speculate, buy precious metals or ammo.
     
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  22. fletcher

    fletcher Darkness always says hello.
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    It almost crashed on its own a couple weeks ago and it wasnt because of hackers. I wouldnt be surprised if there isnt a group out there that can already manipulate the market but are waiting for it to really peak before they cash out and flood the market to the point of irrelevancy.
     
  23. Norm Stansfield

    Norm Stansfield 私は亀が好きだ。

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    Trust has nothing to do with it. No one runs Bitcoin. Bitcoin is an open source protocol. There are no secrets to how it runs. No secrets means no trust is required.
    Like I said, Bitcoin isn't run by anyone, it's a pre-defined protocol, so none of this applies to Bitcoin.

    But let's say we do lift the ban on private currency, and revert back to the system of government where individuals have the right to do everything except that which violates another person's rights. That doesn't mean we just trust that no one will steal. The government would still be in charge of punishing theft and fraud.

    Private banks who issue money couldn't just steal or commit fraud by inflating that money beyond what they promised (like the government does today). In fact, unlike the current system, the government would be able to objectively police the financial system and enforce contracts, because it wouldn't be running the system it's supposed to police.

    As it stands, the government is running the financial system, and there's no on to prevent theft and fraud committed by the government.
     
  24. Neon

    Neon ネオン
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    You are arguing the merits of bitcoin based on the flaws of the current system. I'm not defending the current system, I am saying that bitcoin cannot possibly coexist with it in its current form.
     
  25. Norm Stansfield

    Norm Stansfield 私は亀が好きだ。

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    Money laundering is taking money obtained through illegal activity (theft, robbery, solicitation of bribes, drug trafficking, fraud etc), and investing it into the legitimate economy in a way that leaves no trace between the origin and destination of the money.

    The government is supposed to do police work by solving the actual crimes, instead of keeping track of all financial transactions in a (failed, clearly - and extremely costly) effort to make it impossible for criminals to launder their earnings.

    As an aside, the main source of illicit money is the narcotics trade. Legalizing narcotics would solve over 50% of the problem, all by itself. Addressing government corruption (by limiting the government to its legitimate role of crime prevention) would solve most of the rest.

    [edited for not sounding like a prick - sorry about that]
     
    #25 Norm Stansfield, May 17, 2013
    Last edited: May 17, 2013

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