Sen. Manchin demands complete US ban on Bitcoin(news.cnet.com)
news.cnet.com
Sen. Manchin demands complete US ban on Bitcoin
http://news.cnet.com/8301-13578_3-57619592-38/democratic-senator-demands-complete-u.s-ban-on-bitcoin/
208 comments
Oh no, a letter has been sent!
His letter requesting the ban.
http://www.manchin.senate.gov/public/index.cfm/press-release...
http://www.manchin.senate.gov/public/index.cfm/press-release...
Pure gold
> As of December 2013, the Consumer Price Index (CPI) shows 1.3% inflation, while a recent media report indicated Bitcoin CPI has 98% deflation. In other words, spending Bitcoin now will cost you many orders of wealth in the future. This flaw makes Bitcoin’s value to the U.S. economy suspect, if not outright detrimental.
> As of December 2013, the Consumer Price Index (CPI) shows 1.3% inflation, while a recent media report indicated Bitcoin CPI has 98% deflation. In other words, spending Bitcoin now will cost you many orders of wealth in the future. This flaw makes Bitcoin’s value to the U.S. economy suspect, if not outright detrimental.
"If we don't ban deflationary assets, people won't be forced to use our shitty inflationary assets!"
He's "weary" of the use of bitcoin? If an elected congressperson is going for a publicity stunt, they should at least have someone proof their letters before looking like a doofus...
Sounds a like any other prohibition. Bitcoin seems like the tech equivalent of alcohol: easy to get involved with, really hard to keep track of/stop.
Even worse than an alcohol ban, as alcohol has a conspicuous 'meat space' presence and people who have recently participated in alcohol related activities are often rather easy to pick out.
His demands that regulators prevent Americans from being left 'holding the ball' if/when bitcoin collapses could reasonably be interpreted as a call for a ban on merely possessing bitcoins (not just transfering/selling/mining). If that were to happen (which is unlikely, but seems to be what this asshat wants), having a brainwallet could be considered a "thoughcrime" in the literal, non-hyperbolic sense.
His demands that regulators prevent Americans from being left 'holding the ball' if/when bitcoin collapses could reasonably be interpreted as a call for a ban on merely possessing bitcoins (not just transfering/selling/mining). If that were to happen (which is unlikely, but seems to be what this asshat wants), having a brainwallet could be considered a "thoughcrime" in the literal, non-hyperbolic sense.
It gets absurd. "Owning bitcoin" is just linguistic sugar for having knowledge of a private key that corresponds to a public key that hashes to a bitcoin address that holds bitcoin. It's just a 256-bit number. In essense, every single private key represented on the blockchain becomes an illegal number (https://en.wikipedia.org/wiki/Illegal_number), and not just illegal to publish, but illegal to store and even illegal to think about (aka know about).
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Democratic senator seeks to boost his visibility by taking an exaggerated stance on new and uncertain technologies.
He's desperately trying to pander to his constituents and stay in the news. This is merely his latest stunt.
Edit: not up for re-election.
Edit: not up for re-election.
No, Sen. Manchin is not up for re-election in this election cycle. His term expires in January 2017, with an election in November 2016: http://www.periodicalpress.senate.gov/reelection-2016/
Of course he's up for re-election in the sense that all congresscritters are up for re-election unless they declare otherwise. And I don't think anyone on HN would dispute "pandering" and "staying in the news!"
Of course he's up for re-election in the sense that all congresscritters are up for re-election unless they declare otherwise. And I don't think anyone on HN would dispute "pandering" and "staying in the news!"
I would bet that the constituents of a West Virginia senator generally don't care about alternative currencies. They are more worried about the coal industry.
[deleted]
Probably worth mentioning that Manchin is one of the most conservative Democratic senators before people start flaming him as a liberal bent on destroying freedom.
Note that Chuck Schumer, who National Journal says* was the most liberal senator in 2013 (well, it was a three-way tie) also has signed letters with Manchin to DOJ complaining that Bitcoin is "untraceable" and demanding a crackdown on Silk Road.
Can the most liberal senator be flamed as one? Or is that label never to be used in polite discourse? :)
* http://www.nationaljournal.com/pictures-video/the-15-most-li...
Can the most liberal senator be flamed as one? Or is that label never to be used in polite discourse? :)
* http://www.nationaljournal.com/pictures-video/the-15-most-li...
"Most liberal" is hard to define. I prefer DW-Nominate score which ranks Schumer as the 20th most liberal and Manchin as the 53rd.
http://voteview.org/dwnominate.asp
http://voteview.org/SENATE_SORT112.HTM
http://voteview.org/dwnominate.asp
http://voteview.org/SENATE_SORT112.HTM
The labels aren't nearly as important as understanding that he is part of a power structure that is bent on preventing any sort of challenge to the government's monopoly on currency regulation.
Asking as a non-American, why would someone characterized as "liberal" do this? It seems to me like this is a very thoroughly conservative move and well in line with conservative and reactionary thinking.
Or have the definitions of the words liberal and conservative been swapped recently? A lot of the comments in this thread indicate that this may indeed be the case.
Or have the definitions of the words liberal and conservative been swapped recently? A lot of the comments in this thread indicate that this may indeed be the case.
Perhaps a better way to think about this is: pro-stasis and anti-stasis mentality?
Remember that liberals, who in theory are in favor of progress, were behind the Clipper Chip (Bill Clinton's first major tech initiative), banning "indecency" online (Dem. Sen. James Exon, signed by Clinton), banning linking to drug-related web sites (Dem. Sen. Dianne Feinstein), drafting key portions of the Patriot Act (Clinton admin, late 1999s), introducing key portions of the Patriot Act in September 2000 (Dem. Sen. Patrick Leahy), etc.
I'll give a link for the last one; the rest you can find on your own: http://news.cnet.com/8301-31921_3-20058797-281.html
I can create a similar list for pro-stasis Republicans. Stasis-ism is orthogonal to major party affiliation. Small l-libertarians, on the other hand, tend to be uniformly anti-stasis. :)
Remember that liberals, who in theory are in favor of progress, were behind the Clipper Chip (Bill Clinton's first major tech initiative), banning "indecency" online (Dem. Sen. James Exon, signed by Clinton), banning linking to drug-related web sites (Dem. Sen. Dianne Feinstein), drafting key portions of the Patriot Act (Clinton admin, late 1999s), introducing key portions of the Patriot Act in September 2000 (Dem. Sen. Patrick Leahy), etc.
I'll give a link for the last one; the rest you can find on your own: http://news.cnet.com/8301-31921_3-20058797-281.html
I can create a similar list for pro-stasis Republicans. Stasis-ism is orthogonal to major party affiliation. Small l-libertarians, on the other hand, tend to be uniformly anti-stasis. :)
Indeed, US "liberal" and "conservative" have little to do with their other meanings. If you trace the history back on the terms you can find where they diverged, and there's some traces of connection, but for the most part you're better off taking them as "just variables" that happen to have leading names. I've also observed that the connection to their usage in other countries/polities are unreliable guides as well.
But the basis is still in there somewhere, right?
I mean, here in the EU being conservative means wanting to literally conserve established power structures, with a big emphasis on religious and social rigidity or even regression. It means having the desire to pass laws that benefit powerful centralized interests and marginalize minorities such as poor people or those deemed ethnically inferior. This is absolutely the direction where draconian and arcane laws come from.
Along those lines, I always took "liberal" to mean literally being of a laissez-faire attitude, being secular or at least open to science and advancement, big on personal freedoms and individuality but also often paired with an egalitarian desire for social justice.
I can't shake off the feeling that these words have been redefined in recent discourse in an attempt to prevent people from having a meaningful discussion about issues.
I mean, here in the EU being conservative means wanting to literally conserve established power structures, with a big emphasis on religious and social rigidity or even regression. It means having the desire to pass laws that benefit powerful centralized interests and marginalize minorities such as poor people or those deemed ethnically inferior. This is absolutely the direction where draconian and arcane laws come from.
Along those lines, I always took "liberal" to mean literally being of a laissez-faire attitude, being secular or at least open to science and advancement, big on personal freedoms and individuality but also often paired with an egalitarian desire for social justice.
I can't shake off the feeling that these words have been redefined in recent discourse in an attempt to prevent people from having a meaningful discussion about issues.
"But the basis is still in there somewhere, right?"
Only historically. US Liberalism, being the dominant political ideology in the US (despite its occasional protests to the contrary) is actually often quite conservative today, trying to preserve its changes from being undone (be that by literally being rolled back, or by being modified into something a liberal doesn't want). However noble or terrible that desire may be, it slots into the "conservative" side of the original meanings. US Conservatism is often about tearing those down and replacing it with something else, and while some of that may be modeled with a "return" to an older status quo (be it fictional or based in reality), a lot of it isn't; what's the historically "conservative" answer about internet issues, for instance? Both ideologies are rather strong on the control and quick to reach for the stick of regulation when in power, albeit for different things, but at the moment it's Liberalism that I'd associate with a huge, huge belief in regulations, and while conservatism is not "laissez-faire", the laissez-faire amongst us generally end up on the conservative side when forced to choose sides on the grounds that conservatism in the US at least tolerates the ideas of laissez-faire, whereas liberalism at this point openly mocks it.
Only historically. US Liberalism, being the dominant political ideology in the US (despite its occasional protests to the contrary) is actually often quite conservative today, trying to preserve its changes from being undone (be that by literally being rolled back, or by being modified into something a liberal doesn't want). However noble or terrible that desire may be, it slots into the "conservative" side of the original meanings. US Conservatism is often about tearing those down and replacing it with something else, and while some of that may be modeled with a "return" to an older status quo (be it fictional or based in reality), a lot of it isn't; what's the historically "conservative" answer about internet issues, for instance? Both ideologies are rather strong on the control and quick to reach for the stick of regulation when in power, albeit for different things, but at the moment it's Liberalism that I'd associate with a huge, huge belief in regulations, and while conservatism is not "laissez-faire", the laissez-faire amongst us generally end up on the conservative side when forced to choose sides on the grounds that conservatism in the US at least tolerates the ideas of laissez-faire, whereas liberalism at this point openly mocks it.
Thanks for elaborating by the way, this explains a lot of the dissonance I (subjectively) see daily on HN.
However, this is not totally in sync with how those sides are presented to the public, or the international public in any case. When I turn on Fox News, for example, the ideas there are absolutely what I would identify as conservative. Supporting legislative and social measures that disadvantage gay and poor people, for example. Espousing religion over science. How could such an agenda be considered liberal, especially since they themselves use the word "liberal" as a swear word? This looks perfectly conservative to me, and I'm still really confused because you described these people as functionally liberal.
> what's the historically "conservative" answer about internet issues, for instance?
I'm trying not to refer to American conservatism, but to the concept in its original meaning when I say this:
The internet is new and potentially dangerous to traditional values, so one would expect the attitude towards it to be very negative. That's the default conservative stance, right, to keep the social status quo or regress it where possible.
The internet is a relatively new phenomenon that threatens to change society, it's a level playing field where ordinary people get access to untold quantities of information practically without oversight. If I had to speculate on a default conservative stance to it, without any prior knowledge, I'd wager they'd be trying to outlaw the free aspects of the internet, ridicule its potential, and generally try to convert it so it can serve traditional power structures. And, now looking at what's happening in real life, that somewhat naive expectation turns out to be a pretty good description of what's actually going on.
> the laissez-faire amongst us generally end up on the conservative side when forced to choose sides on the grounds that conservatism in the US at least tolerates the ideas of laissez-faire, whereas liberalism at this point openly mocks it
Can you give an example where that's happening? Looking in from the outside it seems that US conservatives are the driving force behind a lot of legislation with the explicit goal of limiting freedoms and social stability. Granted, both sides seem to agree on much of the more egregious stuff like mass surveillance and terrorism theater - but from where I stand at least I don't see liberals trying to legislate against gay people. It also looks to me like it's the American conservatives who are more in favor of expanding already sweeping police powers.
I mean, sure, in the end it doesn't matter that much to foreigners like me. But it's still puzzling.
However, this is not totally in sync with how those sides are presented to the public, or the international public in any case. When I turn on Fox News, for example, the ideas there are absolutely what I would identify as conservative. Supporting legislative and social measures that disadvantage gay and poor people, for example. Espousing religion over science. How could such an agenda be considered liberal, especially since they themselves use the word "liberal" as a swear word? This looks perfectly conservative to me, and I'm still really confused because you described these people as functionally liberal.
> what's the historically "conservative" answer about internet issues, for instance?
I'm trying not to refer to American conservatism, but to the concept in its original meaning when I say this:
The internet is new and potentially dangerous to traditional values, so one would expect the attitude towards it to be very negative. That's the default conservative stance, right, to keep the social status quo or regress it where possible.
The internet is a relatively new phenomenon that threatens to change society, it's a level playing field where ordinary people get access to untold quantities of information practically without oversight. If I had to speculate on a default conservative stance to it, without any prior knowledge, I'd wager they'd be trying to outlaw the free aspects of the internet, ridicule its potential, and generally try to convert it so it can serve traditional power structures. And, now looking at what's happening in real life, that somewhat naive expectation turns out to be a pretty good description of what's actually going on.
> the laissez-faire amongst us generally end up on the conservative side when forced to choose sides on the grounds that conservatism in the US at least tolerates the ideas of laissez-faire, whereas liberalism at this point openly mocks it
Can you give an example where that's happening? Looking in from the outside it seems that US conservatives are the driving force behind a lot of legislation with the explicit goal of limiting freedoms and social stability. Granted, both sides seem to agree on much of the more egregious stuff like mass surveillance and terrorism theater - but from where I stand at least I don't see liberals trying to legislate against gay people. It also looks to me like it's the American conservatives who are more in favor of expanding already sweeping police powers.
I mean, sure, in the end it doesn't matter that much to foreigners like me. But it's still puzzling.
"However, this is not totally in sync with how those sides are presented to the public, or the international public in any case."
The difference is that I look to actions, not words. There's no evidence based on actions that US liberals have a problem with strong police powers; they talk about how bad it is, but monotonically increase the powers, then use them. Conservatives in the US may occasionally grumble about gay people, but they take no action whatsoever to do anything about it, except in very small jurisdictions. The press plays these issues up because it helps the narrative, but they are not a significant force. There is absolutely 0 chance of any sort of "anti-gay" legislation passing through any element of our government right now, and this will most certainly include whoever is elected in a few years.
Since US liberalism controls the US media, and broadly speaking fairly leftist elements control the international media as well, you do not tend to get a straight view of what conservatives are and are up to. Mind you, I'm not saying you're going to like them if you really knew, but it's a very distorted view that you get. In particular, the media carefully seals away anything like a reasonable argument for their positions, and makes sure to play up only dumb ones. For that matter, it is true that it is also a distorted view of US liberalism that you get; you get a lot of the high rhetoric reported, but good luck hearing about their actual actions. (Seriously; watch the news. How much of it is dedicated to politicians just spewing their lines, and how much of it is dedicated to an in-depth report of what's actually happening in the field where the policies are being implemented? You may be shocked.)
Anyhow, yes, I am reporter on the field with my own slant, but one advantage of not really fitting onto the left/right Republican/Democrat axis is that I get a bit of a clearer view from not having a strong allegiance to either side and psychologically needing to defend "my team". US "Liberalism" and "Conservatism" have shifted a lot from the core meaning of the term. (Indeed, there's a thing called a "Classical Liberal", if you look it up, and that puts you firmly on the US Conservative side. Should have used that example earlier.)
The difference is that I look to actions, not words. There's no evidence based on actions that US liberals have a problem with strong police powers; they talk about how bad it is, but monotonically increase the powers, then use them. Conservatives in the US may occasionally grumble about gay people, but they take no action whatsoever to do anything about it, except in very small jurisdictions. The press plays these issues up because it helps the narrative, but they are not a significant force. There is absolutely 0 chance of any sort of "anti-gay" legislation passing through any element of our government right now, and this will most certainly include whoever is elected in a few years.
Since US liberalism controls the US media, and broadly speaking fairly leftist elements control the international media as well, you do not tend to get a straight view of what conservatives are and are up to. Mind you, I'm not saying you're going to like them if you really knew, but it's a very distorted view that you get. In particular, the media carefully seals away anything like a reasonable argument for their positions, and makes sure to play up only dumb ones. For that matter, it is true that it is also a distorted view of US liberalism that you get; you get a lot of the high rhetoric reported, but good luck hearing about their actual actions. (Seriously; watch the news. How much of it is dedicated to politicians just spewing their lines, and how much of it is dedicated to an in-depth report of what's actually happening in the field where the policies are being implemented? You may be shocked.)
Anyhow, yes, I am reporter on the field with my own slant, but one advantage of not really fitting onto the left/right Republican/Democrat axis is that I get a bit of a clearer view from not having a strong allegiance to either side and psychologically needing to defend "my team". US "Liberalism" and "Conservatism" have shifted a lot from the core meaning of the term. (Indeed, there's a thing called a "Classical Liberal", if you look it up, and that puts you firmly on the US Conservative side. Should have used that example earlier.)
People usually assume that only liberals espouse any form of regulation. The truth is that conservatives do too. It just depends on who they're regulating. (Liberals want to regulate Wall Street and the environment. Conservatives want to regulate gays and vaginas, or anything that threatens wealthy people.)
It is true that some liberals have come out against Bitcoin on the grounds that it could disrupt the effectiveness of monetary policy. And of course, "liberals" in Congress - especially Senators - are typically in the pocket of wealthy people who dislike Bitcoin.
It is true that some liberals have come out against Bitcoin on the grounds that it could disrupt the effectiveness of monetary policy. And of course, "liberals" in Congress - especially Senators - are typically in the pocket of wealthy people who dislike Bitcoin.
I was pretty sure that's what the W.V. after his name meant.
So he's conservative AND a Democrat? Wow, I guess he combines the worst of both sides.
Best of luck with that stunt.
The gov't: one of the few places where 'disruptive' implies 'bad'.
Hmm. I think it's far from the only place. You might want to check a dictionary.
I'm pretty sure tech is the only subculture in which 'disruptive' implies 'good'.
Also, in wireless communication, classroom behavior, etc... Hearing disruptive as a good thing in startup-land always confuses me.
It might be a stunt, but sophisticated investors that aren't tech savvy are scared to death of this pandering. Furthermore, it justifies so many people's public position on bitcoin. After all, if you say it enough it must be true.
How do I start a petition for his resignation - at least from the Senate banking committee? As far as stunts go, this one at least serves a meaningful cause.
How do I start a petition for his resignation - at least from the Senate banking committee? As far as stunts go, this one at least serves a meaningful cause.
Here we are, please sign and fight back!
http://www.ipetitions.com/petition/we-demand-sen-manchins-im...
http://www.ipetitions.com/petition/we-demand-sen-manchins-im...
+1 gold.
Online gambling is banned in the US. Would a Bitcoin ban really be out of character?
Actually, no. More like an attempt is inevitable.
I think the idea of banning it is stupid, but its interesting to read his letter. He doesn't seem to really be confused about what Bitcoin is or how it works, contrary to the common trope that the government only wants to ban things because it doesn't understand them.
Just as a thought experiment: how would the US gov actually go about making it illegal to use Bitcoin, or "ban" it? You obviously can't shut down the protocol itself. Maybe you go after the exchanges and treat them as if they're the drug dealers, if you were to "treat Bitcoin as a crime" (and by that I mean making exchanges or possessing a wallet).
Any other ways hypothetically speaking?
Any other ways hypothetically speaking?
My 'suggestion' - the prostitution route: make the purchasing of bitcoin illegal, and make soliciting for such a sale illegal too.
People will use dogecoin then, so the law will probably refer to "cryptocurrency". Which will not be easy to define and will probably get other centralized currency schemes in trouble as well.
This is a quote from the Manchin letter:
The Senate Homeland Security and Governmental Affairs Committee issued a report just this month stating, “There is widespread concern about the Bitcoin system’s possible impact on national currencies, its potential for criminal misuse, and the implications of its use for taxation.”
This is the (slightly expanded) quote from that report† (which is actually kind of interesting -- it's a survey of bitcoin regulation (or lack thereof) in a bunch of different countries).
There is widespread concern about the Bitcoin system’s possible impact on national currencies, its potential for criminal misuse, and the implications of its use for taxation. Overall, the findings of this report reveal that the debate over how to deal with this new virtual currency is still in its infancy.
So, by omitting that sentence he totally misrepresents the position of the report authors. I generally think bitcoin is overhyped by most of its proponents, but this is a really silly response.
†http://www.loc.gov/law/help/bitcoin-survey/2014-010233%20Com...
The Senate Homeland Security and Governmental Affairs Committee issued a report just this month stating, “There is widespread concern about the Bitcoin system’s possible impact on national currencies, its potential for criminal misuse, and the implications of its use for taxation.”
This is the (slightly expanded) quote from that report† (which is actually kind of interesting -- it's a survey of bitcoin regulation (or lack thereof) in a bunch of different countries).
There is widespread concern about the Bitcoin system’s possible impact on national currencies, its potential for criminal misuse, and the implications of its use for taxation. Overall, the findings of this report reveal that the debate over how to deal with this new virtual currency is still in its infancy.
So, by omitting that sentence he totally misrepresents the position of the report authors. I generally think bitcoin is overhyped by most of its proponents, but this is a really silly response.
†http://www.loc.gov/law/help/bitcoin-survey/2014-010233%20Com...
Here is another good quote from the Manchin letter:
Several other countries, including the European Union, have issued warnings...
It's like they didn't even proofread it. I'm not a Europe expert but I'm pretty sure the European Union isn't a country.
Several other countries, including the European Union, have issued warnings...
It's like they didn't even proofread it. I'm not a Europe expert but I'm pretty sure the European Union isn't a country.
The lack of regulation is worrying. That exchange that just flamed out is an example of what the entire financial system would be with no oversight.
Yes exactly. The exchange that just flamed out was incredibly poorly run, and deserved to go out of business. Now there is space in the market for more competent companies to take over the market share. I'd love to see the entire financial system operate under a meritocracy such as this.
Banks used to fail all of the time with depositors losing assets. This caused a lot of problems, so we enacted some regulation.
Now banks still fail (several weekly, without much notice), but depositors have mandated insurance.
Are you against that?
Now banks still fail (several weekly, without much notice), but depositors have mandated insurance.
Are you against that?
If depositors didn't have mandated insurance, they would pay more attention to the credit-worthiness of the bank they work with, and we might have avoided the 2008 debacle.
> If depositors didn't have mandated insurance, they would pay more attention to the credit-worthiness of the bank they work with, and we might have avoided the 2008 debacle.
Or, more likely, the 2008 debacle (a consequence, in large parts, of removing regulations that addressed contributing causes of the 1929 debacle) would have looked more like the 1929 debacle (since you then would have also removed a regulation designed to mitigate the effect of events like the 1929 debacle).
The absence of regulation of credit-worthiness of banks doesn't give the average depositor either the time, inclination, or skill to evaluate the credit-worthiness of banks, especially when, as was actually the case in the 2008 debacle, information relevant to that is actively being concealed under many layers of obfuscation.
Or, more likely, the 2008 debacle (a consequence, in large parts, of removing regulations that addressed contributing causes of the 1929 debacle) would have looked more like the 1929 debacle (since you then would have also removed a regulation designed to mitigate the effect of events like the 1929 debacle).
The absence of regulation of credit-worthiness of banks doesn't give the average depositor either the time, inclination, or skill to evaluate the credit-worthiness of banks, especially when, as was actually the case in the 2008 debacle, information relevant to that is actively being concealed under many layers of obfuscation.
It seems that the health of the bank is something which is actively obfuscated. Saying "buyer beware" is like telling people that they should be responsible to make sure that the cars they buy are safe enough, or to make sure that the restaurants they eat at have clean enough standards in the kitchens. That's the entire point of regulatory inspections: No one can afford to be attentive to that level of detail or be an expert in everything.
I agree people cannot be attentive to everything.
HOWEVER, people can be a lot more attentive now then they could ten years ago (for example, online reviews of cars/restaurants/etc) and in ten years they will be able to be even more attentive.
If we do things that foster attentiveness, everyone will be better off.
HOWEVER, people can be a lot more attentive now then they could ten years ago (for example, online reviews of cars/restaurants/etc) and in ten years they will be able to be even more attentive.
If we do things that foster attentiveness, everyone will be better off.
> HOWEVER, people can be a lot more attentive now then they could ten years ago (for example, online reviews of cars/restaurants/etc)
Its a good thing online reviews are reliable sources of information with transparent provenance that neither the company itself nor its competitors spend substantial efforts loading with false-flag propaganda.
Or, at least, that's a good thing in whatever alternate universe it is true in.
Its a good thing online reviews are reliable sources of information with transparent provenance that neither the company itself nor its competitors spend substantial efforts loading with false-flag propaganda.
Or, at least, that's a good thing in whatever alternate universe it is true in.
If depositors didn't have mandated insurance, they would have magically had the time and inclination to learn about credit default swaps and see the dangers in the system that many people who do that for a living were unaware of?
Sure: If I didn't have mandated insurance, I would bank with the bank that maintained a high fractional reserve- It's obvious to anyone that you'd want to do this.
Banks that handled credit default swaps surprise had the lowest fractional reserves.
Banks that handled credit default swaps surprise had the lowest fractional reserves.
Its pretty clear that whatever not having mandatory insurance does, it doesn't suddenly imbue consumers with the insight and skill to manage their deposits in a way that avoids widespread catastrophic bank failures and attendant losses. This has been tested in the real world.
Of course. Next time I'm choosing a bank I'll be sure to pay close attention to the part of their brochure where they say what their fractional reserve is.
You don't have to, because of FDIC insurance...
...and now you know why things went to hell in 2008.
...and now you know why things went to hell in 2008.
That's a completely different take on the financial crisis than anything else I've read. The history of the financial industry is one of the industry finding ways around existing regulation, over-leveraging itself, and then crashing.
Financial panics were a common occurrence before there were regulations. You're saying that less regulation would create a more stable system, but that historically has not been the case.
In other words, for what you're proposing, we tried it and it didn't work.
Financial panics were a common occurrence before there were regulations. You're saying that less regulation would create a more stable system, but that historically has not been the case.
In other words, for what you're proposing, we tried it and it didn't work.
Actually, we sorta tried this between 1850 and 1920, which is pretty much the highest GDP growth time period in the history of the US.
Which also included a financial crisis and recession roughly every 10 years and ended with the Great Depression. How much faster would the economy have grown if it hadn't been plunged into recession once a decade?
http://en.wikipedia.org/wiki/Financial_crisis#History
http://en.wikipedia.org/wiki/Financial_crisis#History
There is no way I have enough time in my life to fully understand how the banking system works to judge their worth. And I suspect those in power prefer that the masses don't have that understanding either.
I barely understand how my Honda Civic works.
I barely understand how my Honda Civic works.
You can't look online and find info from more knowledgeable people on whether the Honda Civic is a good car?
[deleted]
Sure I could do that. That's how I ended up with a Honda Civic. I can also ask my friends if they like Bank Of America or CitiBank or whatever; but to truly understand the health of a bank... I'd need a degree or something.
No, you just go to a bank that maintains 100% fractional reserves (if you don't wan't to take on additional risk)
No degree required.
No degree required.
Easier said that done apparently... http://www.ronpaulforums.com/showthread.php?148961-Any-Full-...
I'm having trouble understanding how such a bank would be profitable; assuming banks need to be profitable to justify their existence.
I'm having trouble understanding how such a bank would be profitable; assuming banks need to be profitable to justify their existence.
They're not profitable because of the existence of fdic insurance.
> They're not profitable because of the existence of fdic insurance.
Even without FDIC insurance a bank with 100% fractional reserve couldn't be profitable (or even operate), unless accounts had negative interest rates, as it couldn't loan money out from deposits to earn revenue.
Even without FDIC insurance a bank with 100% fractional reserve couldn't be profitable (or even operate), unless accounts had negative interest rates, as it couldn't loan money out from deposits to earn revenue.
The fact that people still kept funds in Mt. Gox is proof enough of the absurdity of this position.
I didn't keep my funds in Mt. Gox, due to the risks involved.
It's hard for me to judge from my position whether others who did used bad judgement or simply were unlucky while taking a calculated risk.
It's hard for me to judge from my position whether others who did used bad judgement or simply were unlucky while taking a calculated risk.
The average consumer doesn't understand banking well enough to realise they'd receive a better interest/fee/overdraft/etc structure at half a dozen other banks that actively market their more favourable interest/fee/overdraft structure, never mind well enough to understand the bank's exposure to complex toxic assets that couldn't be grasped by professionals paid orders of magnitude more than them specifically to quantify that risk.
Why not just use a bank that doesn't do any outside investing and keeps all the money inside the bank?
Then you don't need any "experts".
(To answer my own question: These types of banks don't exist because FDIC insurance makes them unprofitable)
Then you don't need any "experts".
(To answer my own question: These types of banks don't exist because FDIC insurance makes them unprofitable)
The bond holders and shareholders didn't have insurance nor did the counter parties (mostly other banks)[0] but didn't effectively assess the risks despite thousands of analysts between them. How could/should a retail investor with a few hundred or thousand dollars assessed the bank's creditworthiness? A few analysts, economists and traders saw it coming but most did not.
[0] I know they were largely bailed out but there was no promise in advance (and we probably agree that they shouldn't have been bailed out to the extent that they were.
[0] I know they were largely bailed out but there was no promise in advance (and we probably agree that they shouldn't have been bailed out to the extent that they were.
Simple: You go to a bank that isn't taking these risks to begin with. (Such banks don't exist now because FDIC insurance means there's no money in creating such a bank.)
Even in such a case how do you evaluate the quality of the loans leant?
Yes I'm against mandated insurance. Some enterprising group of young people will be able to make a decent living evaluating the viability of bitcoin (and dogecoin, etc) exchanges and selling the information in a monthly email. So much win. So little compulsion.
The implicit corollaries to this are a) that anyone who wasn't capable of recognizing the exchange as poorly run (eg anyone who isn't a programmer and can't see past the friendly corporate graphics on the landing page) deserves to lose whatever funds they were stupid enough to trust to that institution, and b) if the (alleged) 6% of all extant BTC that went missing turns up in hands of some unknown actor later, well that's nobody's business.
> "anyone who wasn't capable of recognizing the exchange as poorly run (eg anyone who isn't a programmer and can't see past the friendly corporate graphics on the landing page)"
I don't think that being a programmer was necessary to be wary of MtGox.
MtGox was being called out in strong terms as long as 3 years ago on HN and bitcoin forums (https://news.ycombinator.com/item?id=2676263). This sort of knowledge certainly should have found it's way to "non-programmers" at least in the past year.
Trusting MtGox during the past year wasn't a matter of not being a programmer. It was a matter of being an idiot.
Do idiots deserve to lose their money? No. I agree with the rest of your comment.
I don't think that being a programmer was necessary to be wary of MtGox.
MtGox was being called out in strong terms as long as 3 years ago on HN and bitcoin forums (https://news.ycombinator.com/item?id=2676263). This sort of knowledge certainly should have found it's way to "non-programmers" at least in the past year.
Trusting MtGox during the past year wasn't a matter of not being a programmer. It was a matter of being an idiot.
Do idiots deserve to lose their money? No. I agree with the rest of your comment.
>I'd love to see the entire financial system operate under a meritocracy such as this.
It does. Banks fail every day. Hundreds of banks since 2008.
Oh, I'll bet you're talking about the TBTF banks, that were kept afloat with some interesting finance to prevent the global system from collapsing.
I laugh every time someone says they should have all failed. I don't think people realize who, exactly, loses when banks go out of business. Hint: It isn't Jamie Dimon or Lloyd Blankfein (though they would temporarily lose their jobs). It's everyone who owns shares in the bank, everyone who owns bonds of the bank, everyone who works at the bank, everyone who banks at the bank (yes, FDIC covers some, but that itself is a bailout), pension funds, pensioners, insurance users, and on and on. These aren't some rich "banksters", they're your friends and neighbors.
It does. Banks fail every day. Hundreds of banks since 2008.
Oh, I'll bet you're talking about the TBTF banks, that were kept afloat with some interesting finance to prevent the global system from collapsing.
I laugh every time someone says they should have all failed. I don't think people realize who, exactly, loses when banks go out of business. Hint: It isn't Jamie Dimon or Lloyd Blankfein (though they would temporarily lose their jobs). It's everyone who owns shares in the bank, everyone who owns bonds of the bank, everyone who works at the bank, everyone who banks at the bank (yes, FDIC covers some, but that itself is a bailout), pension funds, pensioners, insurance users, and on and on. These aren't some rich "banksters", they're your friends and neighbors.
> I'd love to see the entire financial system operate under a meritocracy such as this.
You might think you would, but I suspect you would not.
You might think you would, but I suspect you would not.
In other words, "I disagree with you."
Could you add something to the discussion? A real argument, perhaps? Nobody called for a hand-raising of who was for or against economic regulation.
Could you add something to the discussion? A real argument, perhaps? Nobody called for a hand-raising of who was for or against economic regulation.
Actually, I'd say it's more snarky than "I disagree with you", it's "you haven't thought this through or you would disagree with you".
If you like analogies, consider the difference between using an old, creaky, but battle-tested codebase that handles mission-critical tasks, and saying "we should just throw it all away, build a quick and dirty open source replacement, and let people fork the heck out of it". Old crufty code contains lots of horrible crap, but a lot of it is there because it's necessary. Replacing the financial system with some kind of anarchy -- meritocratic or not -- is going to have the same effect, and we can't afford for something as critical to everyone's wellbeing as the financial system turn into an unstable Darwinian mess.
In any event, I was going to write an essay, but a one-liner was funnier.
If you like analogies, consider the difference between using an old, creaky, but battle-tested codebase that handles mission-critical tasks, and saying "we should just throw it all away, build a quick and dirty open source replacement, and let people fork the heck out of it". Old crufty code contains lots of horrible crap, but a lot of it is there because it's necessary. Replacing the financial system with some kind of anarchy -- meritocratic or not -- is going to have the same effect, and we can't afford for something as critical to everyone's wellbeing as the financial system turn into an unstable Darwinian mess.
In any event, I was going to write an essay, but a one-liner was funnier.
So you're saying that Bitcoin is so volatile and risky that only a fool use it?
Noted, thanks for the warning.
Noted, thanks for the warning.
> That exchange that just flamed out is an example of what the entire financial system would be with no oversight.
The market is actually recovering quite well from that incident, so what exactly is so worrying? A bad business failed; that's what's supposed to happen.
The market is actually recovering quite well from that incident, so what exactly is so worrying? A bad business failed; that's what's supposed to happen.
Hmm. If I were a customer of Mt Gox and lost money, I don't think I would agree that it's an example of a market working as intended.
Well, what if you were the investor in a start-up, which failed, and you lost your invested money? Would you consider that the market working as intended? What if you loaned someone some money, and they failed and got bankruptcy, meaning you lost your loan. Is that the market working as intended?
We've created this kind of weird deal with banks, where you loan people money at super-low rates, but in return you're insulated from the normal consequences of failure, and have a ton of flexibility in terms of when you can demand repayment of your loan -- to the point where most people don't probably consider their bank balances a loan.
I'm not here to say that this is a good or a bad thing. Mt. Gox was more like a normal loan or almost every other financial instrument in the world, and less like a bank. It seems hard to suggest that it's uniquely bad for Mt. Gox to act like almost every other financial instrument in the world -- as long as expectations are aligned that it's not the curious anomaly known as a "bank."
We've created this kind of weird deal with banks, where you loan people money at super-low rates, but in return you're insulated from the normal consequences of failure, and have a ton of flexibility in terms of when you can demand repayment of your loan -- to the point where most people don't probably consider their bank balances a loan.
I'm not here to say that this is a good or a bad thing. Mt. Gox was more like a normal loan or almost every other financial instrument in the world, and less like a bank. It seems hard to suggest that it's uniquely bad for Mt. Gox to act like almost every other financial instrument in the world -- as long as expectations are aligned that it's not the curious anomaly known as a "bank."
I don't have a dog in this fight and I'm not interested in an extended debate... but I don't think most of Mt Gox's customers realized that by letting Mt Gox hold their money they were effectively investing in a high-risk venture under extremely unfavorable terms.
There were plenty of warning signs that Gox had serious issues, and they had existed for months.
The real situation turns out to be far worse than I expected, but what I expected had me off Gox months ago.
The real situation turns out to be far worse than I expected, but what I expected had me off Gox months ago.
That's their problem, it's a currency exchange, trading is a risky business, giving your money to strangers shouldn't be taken lightly and you shouldn't just presume it's safe. The Gox problems were not a secret, 10 seconds of research would have informed anyone of them.
Trading is a risky business, but "the exchange loses my money" is not supposed to be a substantial portion of that risk...
Or to put it another way, if people properly understood (i) the nature of counterparty risk, and (ii)how the average Bitcoin exchange handled transactions, suddenly those banking fees would seem like an absolute bargain.
Comity! I don't have a dog in the fight either, and I agree that expectations alignment and transparency are key, and that it is likely that neither were present here.
And if I were a career criminal, I'd probably have a pretty low opinion of the justice system (actual problems with said justice system aside).
My point? It's hard to be reasonable about things when you're coming at them from a certain perspective. Just as a criminal sentenced to life without parole probably thinks that the courts trying him are corrupt, people who lost a lot of money on MtGox probably think that the entire economic system and Bitcoin market is broken. Are they correct? It's possible, but they're not in the most rational frame-of-mind right now, are they?
My point? It's hard to be reasonable about things when you're coming at them from a certain perspective. Just as a criminal sentenced to life without parole probably thinks that the courts trying him are corrupt, people who lost a lot of money on MtGox probably think that the entire economic system and Bitcoin market is broken. Are they correct? It's possible, but they're not in the most rational frame-of-mind right now, are they?
So? Businesses fail, whether you like it or not, that is how markets are supposed to function. It is clearly an example of a functional market. That doesn't mean people aren't defrauded, there's no such thing as a market without crime.
A bad business took millions of people's dollars and disappeared them — that's not what is supposed to happen.
Yes it is, that's what a failure is. A business can't fail and not lose money, it fails because it loses money.
There's an enormous difference between a business taking a loss and making other people's money disappear. If the corner grocer up and decides to close the place, they don't take my property with them. If my dry cleaner had to close up shop, I would not expect them to sell my suit off. Destroying other people's property upon closure is not a normal characteristic of a business failing. That's more than just a business failure.
You're making huge presumptions about a failure that is still in progress. You have no idea if that money actually disappeared or not or whether fraud was involved or not. You're claiming the unknown isn't normal, but you can't know that because you don't know what happened yet, no one does.
If fraud is involved, someone will go to jail and authorities will attempt to recover assets. This is perfectly normal in a functioning market.
You cannot claim that because crime occurs the market isn't functioning.
If fraud is involved, someone will go to jail and authorities will attempt to recover assets. This is perfectly normal in a functioning market.
You cannot claim that because crime occurs the market isn't functioning.
This is what I was addressing:
"what exactly is so worrying? A bad business failed; that's what's supposed to happen."
If all that had happened was a bad business failed, that would not be very worrying. I don't think anybody would be upset if MtGox had simply closed their doors and returned all their customers' funds. What is worrying is how many people outside of the business appear to have lost their property in the incident.
You can judge for yourself whether you feel the market is "functioning" — but if that many people lost that much money, it is absolutely not what is supposed to happen when a business fails.
You seem to be of the opinion that whether a market is riskier than most participants realize (and would be willing to tolerate if they did know) is tangential to how well it is functioning. That's a valid viewpoint. But it still makes sense for participants to worry when they realize how little safety they have in the market.
"what exactly is so worrying? A bad business failed; that's what's supposed to happen."
If all that had happened was a bad business failed, that would not be very worrying. I don't think anybody would be upset if MtGox had simply closed their doors and returned all their customers' funds. What is worrying is how many people outside of the business appear to have lost their property in the incident.
You can judge for yourself whether you feel the market is "functioning" — but if that many people lost that much money, it is absolutely not what is supposed to happen when a business fails.
You seem to be of the opinion that whether a market is riskier than most participants realize (and would be willing to tolerate if they did know) is tangential to how well it is functioning. That's a valid viewpoint. But it still makes sense for participants to worry when they realize how little safety they have in the market.
I didn't say it's what's supposed to happen when a business fails, I said bad businesses are supposed to fail. We can't talk about what happened yet, the incident is still in progress. For all we know the acquisition rumours are true, Gox will reappear under new management and investors will be compensated.
'The money' was mostly imaginary, even beyond the imaginariness of bitcoins. Lots of the coins were bought at a much lower rate; they were ALL valued at the value of the last coin traded. Makes for a big, inflated, imaginary 'loss'.
But in fact only the money invested was lost, which I imagine was an order of magnitude smaller than what was reported.
But in fact only the money invested was lost, which I imagine was an order of magnitude smaller than what was reported.
All money is imaginary.
It is in its infancy; if bitcoins are viable, something will have to be done.
It's not an if; they're already viable and already used enough to matter.
That's funny...
When Lehman Bros went down, the US economy went to hell.
When MtGox went down, the bitcoin price returned to its previous level within a couple days.
Clearly we need more oversight of bitcoin.
When Lehman Bros went down, the US economy went to hell.
When MtGox went down, the bitcoin price returned to its previous level within a couple days.
Clearly we need more oversight of bitcoin.
The assets lost in MtGox were a rounding error for Lehman.
Yes, but as a proportion of the relevant market, they were far greater, which actually strengthens the point.
No it doesn't. The relevant market is trivial compared to the size of the global financial system. The entire Bitcoin market could evaporate today and cause barely a ripple.
Lehman had significant assets in the fiat currency of the largest economy in the world, a fiat currency that also forms significant portions of the cash reserves of other major economies. This is to say nothing of the interconnected investments and chain reactions this caused, since it wasn't just about the amount of money lost but whose money.
Lehman had significant assets in the fiat currency of the largest economy in the world, a fiat currency that also forms significant portions of the cash reserves of other major economies. This is to say nothing of the interconnected investments and chain reactions this caused, since it wasn't just about the amount of money lost but whose money.
Yes, everything you say is correct (AFAIK), but it's not what I was talking about.
The thesis of my comment was this: the collapse of MtGox involved a larger proportion of the bitcoin market than the proportion of the dollar market involved in the collapse of Lehman. Ergo, the collapse of MtGox is more significant to Bitcoin than the collapse of Lehman was to the dollar.
The thesis of my comment was this: the collapse of MtGox involved a larger proportion of the bitcoin market than the proportion of the dollar market involved in the collapse of Lehman. Ergo, the collapse of MtGox is more significant to Bitcoin than the collapse of Lehman was to the dollar.
In terms of USD, or in terms of market cap?
> The lack of regulation is worrying.
What lack of regulation?
MtGox existed because it is nearly impossible to open an exchange in the US. Almost every other country is more Bitcoin-friendly in terms of regulation than the US.
Or are you talking about regulating the source code and running instances of the Bitcoin client?
What lack of regulation?
MtGox existed because it is nearly impossible to open an exchange in the US. Almost every other country is more Bitcoin-friendly in terms of regulation than the US.
Or are you talking about regulating the source code and running instances of the Bitcoin client?
> MtGox existed because it is nearly impossible to open an exchange in the US.
That's kind of orthogonal to the issue of whether bitcoin can be regulated (it can, but that has little do with why exchanges in the US are legally difficult.) An exchange that trades bitcoin for boring fiat currency has to manage and distribute funds from fiat currency accounts, and its US regulation of that activity that produces a significant compliance cost to running an exchange in the US.
That's kind of orthogonal to the issue of whether bitcoin can be regulated (it can, but that has little do with why exchanges in the US are legally difficult.) An exchange that trades bitcoin for boring fiat currency has to manage and distribute funds from fiat currency accounts, and its US regulation of that activity that produces a significant compliance cost to running an exchange in the US.
Perhaps the very existence of a currency that cannot be regulated is worrying?
In what sense do you consider bitcoin to be a currency that "cannot be" regulated?
Do you mean that it cannot be regulated because there isn't an effective way for governments to exert control over how much of it is produced? I don't see that as being particularly worrying. No more so than foreign currencies are worrying... does Iceland worry that they cannot control the production of Argentine pesos?
Do you mean in the sense that businesses that use it cannot be regulated? Because that is obviously false. Of course businesses which use bitcoin can be regulated. Why couldn't they be? As VMG points out, the regulation of bitcoin businesses is not hypothetical; they are regulated.
Do you mean in the sense that bitcoins cannot be taxed? Because that is also obviously false. Here is how the IRS could tax bitcoin: "Attention American taxpayers: report your bitcoin shit, or we will nail you for tax evasion and send your ass to jail." How the hell do you think they tax all-cash businesses?
Bitcoin does not fundamentally change the game like many people seem to think it does.
Do you mean that it cannot be regulated because there isn't an effective way for governments to exert control over how much of it is produced? I don't see that as being particularly worrying. No more so than foreign currencies are worrying... does Iceland worry that they cannot control the production of Argentine pesos?
Do you mean in the sense that businesses that use it cannot be regulated? Because that is obviously false. Of course businesses which use bitcoin can be regulated. Why couldn't they be? As VMG points out, the regulation of bitcoin businesses is not hypothetical; they are regulated.
Do you mean in the sense that bitcoins cannot be taxed? Because that is also obviously false. Here is how the IRS could tax bitcoin: "Attention American taxpayers: report your bitcoin shit, or we will nail you for tax evasion and send your ass to jail." How the hell do you think they tax all-cash businesses?
Bitcoin does not fundamentally change the game like many people seem to think it does.
In the first sense. Does the US worry that it can't directly control the production of renminbi? Absolutely.
Maybe they should not. I see absolutely no reason why you would find it worrying that they cannot. That's basically just being worried by the sovereignty of other nations; worried that you can't boss other people around... what a perverted concern.
If bitcoin is only worrying to the extent that foreign currencies are worrying, then I don't see what the big deal is. They cope with the existence of what, 179 foreign currencies right now (minus a few pegged to the dollar, but whatever)? They can learn to cope with 180.
If bitcoin is only worrying to the extent that foreign currencies are worrying, then I don't see what the big deal is. They cope with the existence of what, 179 foreign currencies right now (minus a few pegged to the dollar, but whatever)? They can learn to cope with 180.
Worrying to the OP - I find it enormously interesting.
And at least in the case of the US they can (and do) lean pretty hard on any of the other 179 governments when they really want to. There is no central Bitcoin bank to lean on. That's all I'm saying.
And at least in the case of the US they can (and do) lean pretty hard on any of the other 179 governments when they really want to. There is no central Bitcoin bank to lean on. That's all I'm saying.
Ridiculous. The total value of all bitcoins at their peak price is not enough to harm the US economy. And if the non - inflationary constraints of the system are really so fatal then why bother calling for a ban?
The very fact that powerful people and corporations want to kill Bitcoin in the cradle is reason enough for me to support it.
Thank you, Senator Manchin, for reminding the world that this is a political struggle, not a get-rich-quick scheme.
Thank you, Senator Manchin, for reminding the world that this is a political struggle, not a get-rich-quick scheme.
"They very fact that powerful, rich fat-cats want to eradicate disease[1] and provide eduction[2] is reason enough for me to support spreading disease and remaining ignorant."
While a lot of people repeat the proverb that "the enemy of my enemy is my friend", extrapolation like that is not deduction and can often be incorrect. A better phrase may be "the enemy of my enemy is a possible ally".
Unfortunately, the fact that those who currently abuse our economy want to kill Bitcoin doesn't remove Bitcoin's deflationary[3] nature. Support by certain enemies doesn't necessarily make this a political struggle, either.
[1] Bill & Melinda Gates Foundation, Howard Hughes Medical Institute, many others
[2] Andrew W. Mellon Foundation, William and Flora Hewlett Foundation, many others
[3] I suggest that anybody wishing to demonstrate their ignorance of basic economics by asserting that deflation is "good", should instead spend their time contacting a organization like those in [2], who may be able to provide financial assistance, because something must be limiting their assess to a freshman-level macroeconomics class.
While a lot of people repeat the proverb that "the enemy of my enemy is my friend", extrapolation like that is not deduction and can often be incorrect. A better phrase may be "the enemy of my enemy is a possible ally".
Unfortunately, the fact that those who currently abuse our economy want to kill Bitcoin doesn't remove Bitcoin's deflationary[3] nature. Support by certain enemies doesn't necessarily make this a political struggle, either.
[1] Bill & Melinda Gates Foundation, Howard Hughes Medical Institute, many others
[2] Andrew W. Mellon Foundation, William and Flora Hewlett Foundation, many others
[3] I suggest that anybody wishing to demonstrate their ignorance of basic economics by asserting that deflation is "good", should instead spend their time contacting a organization like those in [2], who may be able to provide financial assistance, because something must be limiting their assess to a freshman-level macroeconomics class.
Why rant about deflation and throw insults about "freshman-level macroeconomics"?
Those topics have nothing to do with powerful defenders of the status quo attempting to smother innovation before it has a chance to work out the bugs.
Those topics have nothing to do with powerful defenders of the status quo attempting to smother innovation before it has a chance to work out the bugs.
Because the those "defenders of the status quo" are RIGHT in this case, even though the idea of an uncontrolled crypto-currency is something that would do society a lot of good right now.
Just not bitcoin.
The travesty of all this is that the bitcoin True Believers - so desperate to make it work - are making such a target of themselves, we now have people trying to ban all crypto-currency[1]. That might be a worthwhile fight if bitcoin actually stood a chance of becoming any sort of competitor to the dollar, but because an idiot guaranteed it would deflate, that goal can never be achieved. Instead of disrupting government-based currencies, locking in deflation made bitcoin dependent[2] on external, stable money.
This is a failure to understand this basic econ, not a "bug". In fact, many bitcoin evangelists try and use deflation as a selling point, placing them only a hair above "intelligent design" on a scale of stupidity.
Listen, I want as much as anybody to see something break the status quo where banksters get to run everything. Do you want to guarantee they keep the dollar? Do you want to scare those banksters into cracking down on not only on bitcoin but future alternatives as well? The fight them.
Or do you want support the larger goal of a non-government currency? If so, you need to realize that they are partly right in this case, and bitcoin needs to be left to die, so we can focus on some new currency that learns from these mistakes, and isn't tied to the dollar.
[1] http://yro.slashdot.org/story/14/02/27/1326200/wv-senator-ca...
[2] http://computationallyendowed.com/blog/2013/11/27/bitcoin-de...
Just not bitcoin.
The travesty of all this is that the bitcoin True Believers - so desperate to make it work - are making such a target of themselves, we now have people trying to ban all crypto-currency[1]. That might be a worthwhile fight if bitcoin actually stood a chance of becoming any sort of competitor to the dollar, but because an idiot guaranteed it would deflate, that goal can never be achieved. Instead of disrupting government-based currencies, locking in deflation made bitcoin dependent[2] on external, stable money.
This is a failure to understand this basic econ, not a "bug". In fact, many bitcoin evangelists try and use deflation as a selling point, placing them only a hair above "intelligent design" on a scale of stupidity.
Listen, I want as much as anybody to see something break the status quo where banksters get to run everything. Do you want to guarantee they keep the dollar? Do you want to scare those banksters into cracking down on not only on bitcoin but future alternatives as well? The fight them.
Or do you want support the larger goal of a non-government currency? If so, you need to realize that they are partly right in this case, and bitcoin needs to be left to die, so we can focus on some new currency that learns from these mistakes, and isn't tied to the dollar.
[1] http://yro.slashdot.org/story/14/02/27/1326200/wv-senator-ca...
[2] http://computationallyendowed.com/blog/2013/11/27/bitcoin-de...
I agree. It was already pretty obvious that Bitcoin and other such crypto-currencies are disruptive to central banks. But now the world's 3 largest powers wanting to ban it, is very similar to how the largest incumbents react to disruption - they try to fight against it as long as possible instead of adopting it. And they lose everytime.
>But now the world's 3 largest powers wanting to ban it, is very similar to how the largest incumbents react to disruption - they try to fight against it as long as possible instead of adopting it. And they lose everytime.
Actually they've managed to suppress tons of things.
In fact, there are tons of disruptions that never made it. Except if, in hindsight, one calls disruption only the things that actually won in the end (in which case it's a tautology -- of course all disruption wins in the end, if disruption is only what wins in the end).
So the "they lose everytime" is a little too optimistic.
Actually they've managed to suppress tons of things.
In fact, there are tons of disruptions that never made it. Except if, in hindsight, one calls disruption only the things that actually won in the end (in which case it's a tautology -- of course all disruption wins in the end, if disruption is only what wins in the end).
So the "they lose everytime" is a little too optimistic.
A tsunami is highly disruptive to central banks as well; it can happen with no warning, and it usually causes so many simultaneous insurance payouts that the entire financial industry is impacted. So banks should adopt the resulting floods?
If we're talking dubious similarities in behavior, I will point out that the people passionately supporting Bitcon seem to have a very cult-like behavior, where they defend the cause even to the point of justifying away its obvious flaws. As a True Believer, they fail to see how absurd their justifications have become.
If we're talking dubious similarities in behavior, I will point out that the people passionately supporting Bitcon seem to have a very cult-like behavior, where they defend the cause even to the point of justifying away its obvious flaws. As a True Believer, they fail to see how absurd their justifications have become.
The important thing here is to remember that anybody who disagrees with you is a fascist, out to destroy America and freedom. There's no possibility that this is a well-intentioned effort, rather than bank-funded malice. Furthermore, it's all the other party's fault. This guy's actually a closet republican / a perfect example of how extreme liberal democrats have become.
waterlesscloud posted a link to the letter. Read it, then (if you have a real opinion past "government = evil" or some equally inane platitude) contact your senator.
Some thoughts on the content (from someone not particularly optimistic about bitcoin, but somewhat more optimistic about cryptocurrencies in general): Manchin does not actually explain how the use of bitcoin harms anyone who does not deliberately buy-in. The theory that it harms the economy in general simply by being volatile strikes me as silly, given that it represents a vanishingly small fraction of our economy (which, as I understand it, is part of the reason it's so volatile, meaning that as its share increases, volatility goes down).
waterlesscloud posted a link to the letter. Read it, then (if you have a real opinion past "government = evil" or some equally inane platitude) contact your senator.
Some thoughts on the content (from someone not particularly optimistic about bitcoin, but somewhat more optimistic about cryptocurrencies in general): Manchin does not actually explain how the use of bitcoin harms anyone who does not deliberately buy-in. The theory that it harms the economy in general simply by being volatile strikes me as silly, given that it represents a vanishingly small fraction of our economy (which, as I understand it, is part of the reason it's so volatile, meaning that as its share increases, volatility goes down).
How this isn't working for me:
"I disagree with or dislike this man." therefore "He must be trying to take freedoms from me."
How this is working for me:
"He is trying to take freedoms from me." therefore "I disagree with and dislike this man"
(To prevent any speculation, I do not currently own any Bitcoin, nor have I ever owned any Bitcoin. I was however once tipped 10 doge on reddit for a rather clever dick joke... I do not have any sort of financial bone in this matter.)
"I disagree with or dislike this man." therefore "He must be trying to take freedoms from me."
How this is working for me:
"He is trying to take freedoms from me." therefore "I disagree with and dislike this man"
(To prevent any speculation, I do not currently own any Bitcoin, nor have I ever owned any Bitcoin. I was however once tipped 10 doge on reddit for a rather clever dick joke... I do not have any sort of financial bone in this matter.)
so close to another dick joke
What a ridiculous argument. Even if it's "well intentioned", that doesn't mean it's not trying to take away a freedom from you. I'm sure NSA was well-intentioned, too, post 9/11 - at least initially before they discovered what power they have, but that's a whole other issue.
You could also agree that Bitcoin needs to be banned, and that banning it is taking a freedom away from you. They are not exclusive.
What worries me most is that they will try to ban the protocol, and not just the USD-Bitcoin and Bitcoin-USD exchanges. Banning the protocol could have much greater negative consequences in the world of programming and cryptography, and it's probably not constitutional anyway.
You could also agree that Bitcoin needs to be banned, and that banning it is taking a freedom away from you. They are not exclusive.
What worries me most is that they will try to ban the protocol, and not just the USD-Bitcoin and Bitcoin-USD exchanges. Banning the protocol could have much greater negative consequences in the world of programming and cryptography, and it's probably not constitutional anyway.
Restriction of freedom is too easy to these people. This is why there's a general angst among libertarians. Any and every problem is to be solved by legislation, filled in by a regulatory agency. Sorry if you're more offended by the rhetoric of those whose freedom is restricted than by dastardly statist actions by those who couldn't even explain what it is they are trying to solve (Do you think Manchin can explain what Bitcoin is?)
Rather than conjuring up this strawman, maybe you should just reply to the one single comment that even comes close to the stance you are describing.
Can't rake in the karma without toplevel posts making broad and vague complaints about unspecified comments.
It's a common pattern both here and on reddit (because top-level meta-commments really are effective for farming karma), and it should really be against the guidelines. Best case scenario: the complaint is 100% valid and on target, but because it is a top level comment and correct it will rise to the top of the discussion while the offending comments will be downvoted and buried at the bottom. Refutations for shitposts should be buried with the shitposts^, visible to those who decide to read the shitposts but out of the way for everyone else. We don't need all discussions "bookended" by shitposts and comments refuting shitposts.
^ Not buried by being downvoted of course (accurate refutations of shitposts should generally be upvoted), but rather buried by merely being the child comment of a downvoted post.
It's a common pattern both here and on reddit (because top-level meta-commments really are effective for farming karma), and it should really be against the guidelines. Best case scenario: the complaint is 100% valid and on target, but because it is a top level comment and correct it will rise to the top of the discussion while the offending comments will be downvoted and buried at the bottom. Refutations for shitposts should be buried with the shitposts^, visible to those who decide to read the shitposts but out of the way for everyone else. We don't need all discussions "bookended" by shitposts and comments refuting shitposts.
^ Not buried by being downvoted of course (accurate refutations of shitposts should generally be upvoted), but rather buried by merely being the child comment of a downvoted post.
If users vote these up, doesn't it meant that they want to read comments like that? Rules are nice, but you can't beat democracy.
I don't think it really implies that. Not outside of any idealized world anyway.
A few things are going on:
* Highly visible posts (on HN, you can get visibility early on by making top level posts. Very recent top level posts tend to be displayed at the top of the page) will receive more votes, up or down, than posts which are less visible.
* Votes are crude. I might see two comments which I think are good, and vote both of them up. But what if I thought one of those comments was not merely good, but excellent? I cannot communicate that to HN without either neglecting to upvote the merely good comment, or by 'strategically' downvoting the good comment.
Combine these and a good top level comment refuting a comment will likely receive more upvotes than a superb child comment refuting a comment, even if each individual reader in the thread would say that they preferred the child comment. Vote counts, despite appearing democratic from 1000', do not necessarily illustrate the will of the readers.
There is a third thing going on too:
* People love online drama and arguments.
Exhibit A would be Reddit's 'subreddit drama' subreddit, which does nothing but link to arguments on reddit for the amusement of the subscribers. Because of this, posts that are confrontational or take unnecessarily strong stances and indict large vaguely defined groups of people will rake in the upvotes. Maybe that is what HN readers want, but should that be what HN gives them? If the site ran itself as a pure democracy with no guidelines or moderator assisted shaping, it would all just be image macros and pictures of pets.
A few things are going on:
* Highly visible posts (on HN, you can get visibility early on by making top level posts. Very recent top level posts tend to be displayed at the top of the page) will receive more votes, up or down, than posts which are less visible.
* Votes are crude. I might see two comments which I think are good, and vote both of them up. But what if I thought one of those comments was not merely good, but excellent? I cannot communicate that to HN without either neglecting to upvote the merely good comment, or by 'strategically' downvoting the good comment.
Combine these and a good top level comment refuting a comment will likely receive more upvotes than a superb child comment refuting a comment, even if each individual reader in the thread would say that they preferred the child comment. Vote counts, despite appearing democratic from 1000', do not necessarily illustrate the will of the readers.
There is a third thing going on too:
* People love online drama and arguments.
Exhibit A would be Reddit's 'subreddit drama' subreddit, which does nothing but link to arguments on reddit for the amusement of the subscribers. Because of this, posts that are confrontational or take unnecessarily strong stances and indict large vaguely defined groups of people will rake in the upvotes. Maybe that is what HN readers want, but should that be what HN gives them? If the site ran itself as a pure democracy with no guidelines or moderator assisted shaping, it would all just be image macros and pictures of pets.
I think part of the problem is an upvoted reply post doesn't filter to the top of the page, it's tied to the rank of its parent. A +10 reply post, replying to a -3 top-level post, will be seen by no one, despite being highly valued by the 10 people who did see it. A -5 reply post to a +6 top-level post will still be in reasonable scrolling range.
Top-level posts have a major visibility advantage over reply posts, and thus have a karma advantage.
I wonder if weighting a top-level post's score by the score of its children would help alleviate this. On one hand, there could be more rewards for trolling, since a troll that attracts popular refutations will be visible. On the other hand, a civil post that is both upvoted itself, and invites interesting upvoted discussion, will outrank the troll post.
Top-level posts have a major visibility advantage over reply posts, and thus have a karma advantage.
I wonder if weighting a top-level post's score by the score of its children would help alleviate this. On one hand, there could be more rewards for trolling, since a troll that attracts popular refutations will be visible. On the other hand, a civil post that is both upvoted itself, and invites interesting upvoted discussion, will outrank the troll post.
Maybe we should negatively weight "awarded karma" by the height a comment is on the page.
A 100 point comment that is two or three screens down and buried in a nest of mediocre comments is almost certainly better than a 100 point top level comment at the top of a discussion. The later is a much more difficult and impressive feat.
Comments would have the same point values, but the value that is added to the user's karma score would be weighted. Getting lots of points would still make you feel good about your comment, but it would neutralize more ...strategic karma farming.
A 100 point comment that is two or three screens down and buried in a nest of mediocre comments is almost certainly better than a 100 point top level comment at the top of a discussion. The later is a much more difficult and impressive feat.
Comments would have the same point values, but the value that is added to the user's karma score would be weighted. Getting lots of points would still make you feel good about your comment, but it would neutralize more ...strategic karma farming.
Few people will agree with me and they're never going to implement it, but I think comments shouldn't carry karma. It just encourages too much pettiness.
[deleted]
>Can't rake in the karma without toplevel posts making broad and vague complaints about unspecified comments.
Oh, the irony.
Oh, the irony.
How? My post is not a top level post, is a specific complaint (top level posts calling out nobody in particular), about a specific comment (https://news.ycombinator.com/item?id=7307696), made by a specific person (@srl).
If you want other examples of similarly egregious comments I'd be more than pleased to provide them, but we already have a perfectly functional example right here.
If you want other examples of similarly egregious comments I'd be more than pleased to provide them, but we already have a perfectly functional example right here.
Well, your comment mentions a specific top-level post, but then it goes all meta and rants about non-specific top level posts in general.
That it's not "top level" itself, well, I don't find it as much of a differentiator.
That it's not "top level" itself, well, I don't find it as much of a differentiator.
I am not opposed to people discussing commenting trends or karmic-system theory (_particularly_ when a concrete example is given), I am opposed to them doing it as top level posts in conversations not specifically about commenting trends or voting systems.
"Top level, or not" may not be something that you find to be an interesting consideration, but it is what I am complaining about. Since meta-conversation in general is not what I am complaining about, there is no irony.
"Top level, or not" may not be something that you find to be an interesting consideration, but it is what I am complaining about. Since meta-conversation in general is not what I am complaining about, there is no irony.
Very few politicians have a firsthand understanding of issues like this. You don't have to attribute "fascism" to them to wonder who actually drafted the talking points embodied in that letter.
I think your average HN-er would be surprised by how knowledgeable the staff of politicians are about various things.
You do realise that you're essentially agreeing with the comment you're replying to, since your argument is that it's the staff of politicians who are knowledgeable and not the politicians themselves?
His implication is that it was drafted by lobbyists, because "how else would a Senator hear about Bitcoin?" My point was that staff are very knowledgeable about these things, so I wouldn't assume it was lobbyists.
I'm pretty sure his staff understand this well enough to appraise the senator of who stands on which side of this issue. But that hard-working and intelligent staff isn't there to get in the way of a position backed by lobbyists and donations. They are there to make it work for the senator and minimize risk.
> There's no possibility that this is a well-intentioned effort, rather than bank-funded malice.
I'm pretty sure that every kind of fascism was well-intentioned. Unfortunately, it's not the intention that counts.
I'm pretty sure that every kind of fascism was well-intentioned. Unfortunately, it's not the intention that counts.
Bitcoin is the world's most transparent ponzi scheme.
In other news, Hollywood would still like for the Internet to be banned because it facilitates piracy.
I going to assume anyone in power who wants to outright ban or heavily regulate crypto-currency is in the pocket of big banks.
Doesn't really fit for west virginia but they also have their share of turmoil with massively unsafe mining yet peak corporate profits.
Doesn't really fit for west virginia but they also have their share of turmoil with massively unsafe mining yet peak corporate profits.
Isn't it obvious? West-Virginia's well-funded coal mining lobby doesn't like the competition from Bitcoin mining and moves one of their pawns to block it.
The Federal reserve was created by senator Aldrich
who's daughter was married to the banker Rockefeller. The Federal reserve is privately owned by the member banks themselves among others JP Morgan, City bank. 97% percent of the money in circulation is debt. 1971 Nixon decoupled the Dollar from the Gold standard, essentially
creating a FIAT currency. During the 1990s Allan Greenspan chairman of the Federal reserve set the capital requirements for new loans to near zero in an effort to let the market regulate itself. With no Gold standard to limit the amount of debt it grows exponentially.
https://en.wikipedia.org/wiki/History_of_the_Federal_Reserve... https://en.wikipedia.org/wiki/Abby_Aldrich_Rockefeller
You can see the decoupling here GDP vs median income http://lanekenworthy.net/2008/09/03/slow-income-growth-for-m...
Graph showing the middle classes loosing to the debt system http://lanekenworthy.net/2008/03/09/the-best-inequality-grap...
An Investment Manager's View on the Top 1% http://www2.ucsc.edu/whorulesamerica/power/investment_manage...
Hitting peak debt 2008 http://www.debtdeflation.com/blogs/wp-content/uploads/2014/0...
https://en.wikipedia.org/wiki/History_of_the_Federal_Reserve... https://en.wikipedia.org/wiki/Abby_Aldrich_Rockefeller
You can see the decoupling here GDP vs median income http://lanekenworthy.net/2008/09/03/slow-income-growth-for-m...
Graph showing the middle classes loosing to the debt system http://lanekenworthy.net/2008/03/09/the-best-inequality-grap...
An Investment Manager's View on the Top 1% http://www2.ucsc.edu/whorulesamerica/power/investment_manage...
Hitting peak debt 2008 http://www.debtdeflation.com/blogs/wp-content/uploads/2014/0...
Pretty much everything here is wrong. The Fed is every bit a government agency as NASA.
No, that's incorrect. The Federal Reserve System is an unusual hybrid unlike NASA or any other government agency I can think of. NASA doesn't have Boeing or Raytheon as "member agencies" or as owners of regional space administrations that take their marching orders from a Board of Space Governors appointed by the president.
Some of the critics of the Fed like this book, but I haven't read it myself: http://www.amazon.com/The-Creature-Jekyll-Island-Federal/dp/...
Note I'm not expressing an opinion on the grandparent post's claims one way or another.
Some of the critics of the Fed like this book, but I haven't read it myself: http://www.amazon.com/The-Creature-Jekyll-Island-Federal/dp/...
Note I'm not expressing an opinion on the grandparent post's claims one way or another.
As others who have replied, that's not quite correct. However, substantially all the net income of the Federal Reserve is remitted to the Treasury Department.
Some of it is remitted to the "owning" banks, as a kind of rebate for the token capital they pay. But "ownership" here is not the same as beneficial ownership.
In other words, the Federal Reserve is designed to be not directly linked to the Executive Branch. But it is also designed not to be a profit-making private enterprise.
Some of it is remitted to the "owning" banks, as a kind of rebate for the token capital they pay. But "ownership" here is not the same as beneficial ownership.
In other words, the Federal Reserve is designed to be not directly linked to the Executive Branch. But it is also designed not to be a profit-making private enterprise.
Actually, I'm pretty sure the Fed is a privately-owned company, with preferred shareholders and everything. That's not to say the government isn't hugely influential on what it does, but that it's a completely separate entity.
Of course, I could be completely wrong. I'd actually be interested if someone had proof for either argument.
Of course, I could be completely wrong. I'd actually be interested if someone had proof for either argument.
http://www.federalreserve.gov/faqs/about_12593.htm
http://www.federalreserve.gov/faqs/about_12799.htm
http://www.federalreserve.gov/faqs/about_14986.htm
Seriously, if it involves the U.S. federal government, information about it will be easy to find. You don't need to guess or assume, just do a few simple searches.
edit: Well, not all of it, but the structure of the Fed isn't exactly a national secret.
http://www.federalreserve.gov/faqs/about_12799.htm
http://www.federalreserve.gov/faqs/about_14986.htm
Seriously, if it involves the U.S. federal government, information about it will be easy to find. You don't need to guess or assume, just do a few simple searches.
edit: Well, not all of it, but the structure of the Fed isn't exactly a national secret.
Well here is the shareholder list
http://oneradionetwork.com/wp-content/uploads/FrbNY_owners2....
That's a regional Federal Reserve Bank, not "the Fed". Also, you leave out that those share holders get at most 6% annual return for their investment, since it's capped by law.
> Pretty much everything here is wrong. The Fed is every bit a government agency as NASA.
Longer explanation (and citation) needed.
Longer explanation (and citation) needed.
For anyone who is wondering, I have heard from ABC and Forbes reporters that at least as of now, this ban would not apply to Dogecoin.
But what's their source? Do they have that on-the-record from the good Sen. Manchin himself, or just an unnamed source speculating? Or their own speculation?
Update:
http://www.dailydot.com/politics/senator-joe-manchin-bitcoin...
Manchin would have similar complaints about any such anonymous form of online payment. "It's the anonymous, unregulated nature of it," that Manchin finds a problem, the staffer said.
Manchin would have similar complaints about any such anonymous form of online payment. "It's the anonymous, unregulated nature of it," that Manchin finds a problem, the staffer said.
I love his conflicting concerns: "I am most concerned that as Bitcoin is inevitably banned in other countries, Americans will be left holding the bag on a valueless currency"
Then later in the letter: "[Deflation] makes Bitcoin's value to the US economy suspect, if not outright detrimental".
So.. he's concerned that bitcoin is either extremely inflationary (going to zero) or extremely deflationary. But he's not sure which.
Then later in the letter: "[Deflation] makes Bitcoin's value to the US economy suspect, if not outright detrimental".
So.. he's concerned that bitcoin is either extremely inflationary (going to zero) or extremely deflationary. But he's not sure which.
Good.
Honestly, in the eyes of the USFG, Bitcoin and other cryptocurrencies are like a ticking time bomb. The longer it takes them to act, the value of BTC increases, and it becomes increasingly hard to do anything about it from a federal level since more and more people have real assets invested in these currencies.
The interesting bit is that the most cited complaint against BTC in the popular media is its use as a facilitator of illicit goods, which, due to bitcoin's design, is actually impossible to enforce. If you're already buying drugs and what else online, another law saying you can't use bitcoins aren't going to stop you (other than making it harder by shutting down popular services like Coinbase). The superficial reason for banning bitcoin (reducing illicit transactions) will likely fail completely.
Furthermore, even if all governments ban bitcoins, as long as people have access to encrypted storage / networking, it's unlikely that the value of BTC would drop to zero. It's still a pretty efficient way to handle illegal transactions.
Honestly, in the eyes of the USFG, Bitcoin and other cryptocurrencies are like a ticking time bomb. The longer it takes them to act, the value of BTC increases, and it becomes increasingly hard to do anything about it from a federal level since more and more people have real assets invested in these currencies.
The interesting bit is that the most cited complaint against BTC in the popular media is its use as a facilitator of illicit goods, which, due to bitcoin's design, is actually impossible to enforce. If you're already buying drugs and what else online, another law saying you can't use bitcoins aren't going to stop you (other than making it harder by shutting down popular services like Coinbase). The superficial reason for banning bitcoin (reducing illicit transactions) will likely fail completely.
Furthermore, even if all governments ban bitcoins, as long as people have access to encrypted storage / networking, it's unlikely that the value of BTC would drop to zero. It's still a pretty efficient way to handle illegal transactions.
You can't stop existing Bitcoin users from trading amongst themselves, but it can be made very impractical to acquire Bitcoin with money.
The government can easily isolate Bitcoin exchanges (and any other entity it chooses) from the USD banking infrastructure. Put them on the OFAC list (or similar) and they won't be able to get bank accounts, accept wire/ACH transfers, work with credit cards, or use any other money transmitting service.
Transfers of paper cash in person would be the only option, and a campaign of well-publicized Bitcoin-for-cash sting operations could easily make this too risky for most people.
ASICs are, well, application-specific. It's not exactly easy to fabricate hardware in secret, and there are no excuses to hide behind when you've got a warehouse full of Bitcoin mining rigs.
The government can easily isolate Bitcoin exchanges (and any other entity it chooses) from the USD banking infrastructure. Put them on the OFAC list (or similar) and they won't be able to get bank accounts, accept wire/ACH transfers, work with credit cards, or use any other money transmitting service.
Transfers of paper cash in person would be the only option, and a campaign of well-publicized Bitcoin-for-cash sting operations could easily make this too risky for most people.
ASICs are, well, application-specific. It's not exactly easy to fabricate hardware in secret, and there are no excuses to hide behind when you've got a warehouse full of Bitcoin mining rigs.
Strange, he's on the banking committee but not much banking money: https://www.opensecrets.org/politicians/summary.php?cid=N000...
Dear Secretary Lew, Chairwoman Yellen, Commissioner Curry, Acting Chairman Wetjen, Chairman Gruenberg, Chairwoman White:
I write today to express my concerns about the US Dollar. This cash currency is currently unregulated and has allowed users to participate in illicit activity, while also being highly unstable and disruptive to our economy. For the reasons outlined below, I urge regulators to take appropriate action to limit the abilities of this highly unstable currency.
By way of background, the US Dollar is a crypto-currency that has gained notoriety in recent months due to its rising exchange value and relation to illegal transactions. Each the US Dollar is defined by a public address and a private key, thus the US Dollar is not only a token of value but also a method for transferring that value. It also means that the US Dollar provides a unique digital fingerprint, which allows for anonymous and irreversible transactions.
The very features that make the US Dollar attractive to some also attract criminals who are able to disguise their actions from law enforcement. Due to the US Dollar's anonymity, the cash market has been extremely susceptible to hackers and scam artists stealing millions from the US Dollars users. Anonymity combined with the US Dollar's ability to finalize transactions quickly, makes it very difficult, if not impossible, to reverse fraudulent transactions.
The US Dollar has also become a haven for individuals to buy black market items. Individuals are able to anonymously purchase items such as drugs and weapons illegally. I have already written to regulators once on the now-closed Silkroad, which operated for years in supplying drugs and other black market items to criminals, thanks in large part to the creation of the US Dollar.
That is why more than a handful of countries, and their banking systems, have cautioned against the use of the US Dollar. Indeed, it has been banned in two different countries--Thailand and China--and South Korea stated that it will not recognize the US Dollar as a legitimate currency. Several other countries, including the European Union, have issued warnings to the US Dollar users as their respective governments consider options for regulating or banning its use entirely. While it is disappointing that the world leader and epicenter of the banking industry will only follow suit instead of making policy, it is high time that the United States heed our allies' warnings. I am most concerned that as the US Dollar is inevitably banned in other countries, Americans will be left holding the bag on a valueless currency.
Our foreign counterparts have already understood the wide range of problems even with the US Dollar's legitimate uses - from its significant price fluctuations to its deflationary nature. Just last week, the US Dollar prices plunged after the currency's major exchange, Mt. Gox, experienced technical issues. Two days ago, this exchange took its website down and is no longer even accessible. This was not a unique event; news of plummeting or skyrocketing the US Dollar prices is almost a weekly occurrence. In addition, its deflationary trends ensure that only speculators, such as so-called "the US Dollar miners," will benefit from possessing the cash currency. There is no doubt average American consumers stand to lose by transacting in the US Dollar. As of December 2013, the Consumer Price Index (CPI) shows 1. % inflation, while a recent media report indicated the US Dollar CPI has 98% deflation. In other words, spending the US Dollar now will cost you many orders of wealth in the future. This flaw makes the US Dollar's value to the U.S. economy suspect, if not outright detrimental.
The clear ends of the US Dollar for either transacting in illegal goods and services or speculative gambling make me weary of its use. The Senate Homeland Security and Governmental Affairs Committee issued a report just this month stating, "There is widespread concern about the the US Dollar system's possible impact on national currencies, its potential for criminal misuse, and the implications of its use for taxation. Before the U.S. gets too far behind the curve on this important topic, I urge the regulators to work together, act quickly, and prohibit this dangerous currency from harming hard-working Americans.
Sincerely,
U.S. Joe Manchin III
United States Senator
I write today to express my concerns about the US Dollar. This cash currency is currently unregulated and has allowed users to participate in illicit activity, while also being highly unstable and disruptive to our economy. For the reasons outlined below, I urge regulators to take appropriate action to limit the abilities of this highly unstable currency.
By way of background, the US Dollar is a crypto-currency that has gained notoriety in recent months due to its rising exchange value and relation to illegal transactions. Each the US Dollar is defined by a public address and a private key, thus the US Dollar is not only a token of value but also a method for transferring that value. It also means that the US Dollar provides a unique digital fingerprint, which allows for anonymous and irreversible transactions.
The very features that make the US Dollar attractive to some also attract criminals who are able to disguise their actions from law enforcement. Due to the US Dollar's anonymity, the cash market has been extremely susceptible to hackers and scam artists stealing millions from the US Dollars users. Anonymity combined with the US Dollar's ability to finalize transactions quickly, makes it very difficult, if not impossible, to reverse fraudulent transactions.
The US Dollar has also become a haven for individuals to buy black market items. Individuals are able to anonymously purchase items such as drugs and weapons illegally. I have already written to regulators once on the now-closed Silkroad, which operated for years in supplying drugs and other black market items to criminals, thanks in large part to the creation of the US Dollar.
That is why more than a handful of countries, and their banking systems, have cautioned against the use of the US Dollar. Indeed, it has been banned in two different countries--Thailand and China--and South Korea stated that it will not recognize the US Dollar as a legitimate currency. Several other countries, including the European Union, have issued warnings to the US Dollar users as their respective governments consider options for regulating or banning its use entirely. While it is disappointing that the world leader and epicenter of the banking industry will only follow suit instead of making policy, it is high time that the United States heed our allies' warnings. I am most concerned that as the US Dollar is inevitably banned in other countries, Americans will be left holding the bag on a valueless currency.
Our foreign counterparts have already understood the wide range of problems even with the US Dollar's legitimate uses - from its significant price fluctuations to its deflationary nature. Just last week, the US Dollar prices plunged after the currency's major exchange, Mt. Gox, experienced technical issues. Two days ago, this exchange took its website down and is no longer even accessible. This was not a unique event; news of plummeting or skyrocketing the US Dollar prices is almost a weekly occurrence. In addition, its deflationary trends ensure that only speculators, such as so-called "the US Dollar miners," will benefit from possessing the cash currency. There is no doubt average American consumers stand to lose by transacting in the US Dollar. As of December 2013, the Consumer Price Index (CPI) shows 1. % inflation, while a recent media report indicated the US Dollar CPI has 98% deflation. In other words, spending the US Dollar now will cost you many orders of wealth in the future. This flaw makes the US Dollar's value to the U.S. economy suspect, if not outright detrimental.
The clear ends of the US Dollar for either transacting in illegal goods and services or speculative gambling make me weary of its use. The Senate Homeland Security and Governmental Affairs Committee issued a report just this month stating, "There is widespread concern about the the US Dollar system's possible impact on national currencies, its potential for criminal misuse, and the implications of its use for taxation. Before the U.S. gets too far behind the curve on this important topic, I urge the regulators to work together, act quickly, and prohibit this dangerous currency from harming hard-working Americans.
Sincerely,
U.S. Joe Manchin III
United States Senator
You really can't blame him for trying. If crypto-currencies supplant state-based currencies, especially if one were to crop up that would be less traceable than bitcoin, whole swaths of governments around the world find themselves increasingly irrelevant and, quite probably, powerless to make themselves more relevant.
And if government can't figure out how much a person makes or what he's worth, I'm pretty sure that leads to something way less dreamy and awesome than it sounds...because, if not, I think they would've covered such a thing in my public school education.
And if government can't figure out how much a person makes or what he's worth, I'm pretty sure that leads to something way less dreamy and awesome than it sounds...because, if not, I think they would've covered such a thing in my public school education.
This is the type of people that keep countries from innovation. I don't have bitcoins, but for what I know the Bitcoin value isn't high enough to cause problems to the U.S. economy.
I suspect a few in the BitCoin/tech community will lobby Manchin or other members of Congress the other way. There is enough financial interest in BitCoin now that it won't be easily outlawed.
Either way, Congress can't ban BitCoin but they can ban BitCoin exchanges and BitCoin payment processors. Good luck with that.
Either way, Congress can't ban BitCoin but they can ban BitCoin exchanges and BitCoin payment processors. Good luck with that.
>Indeed, it has been banned in two different countries--Thailand and China
I'm so glad our representatives are looking at China for a model of how things should be. Hey, China is doing it, it must be OK.
You can make all sorts of arguments about banning BC, but don't use the fact that it's banned in oppressive countries as one of them and then expect me to respect your opinion.
I'm so glad our representatives are looking at China for a model of how things should be. Hey, China is doing it, it must be OK.
You can make all sorts of arguments about banning BC, but don't use the fact that it's banned in oppressive countries as one of them and then expect me to respect your opinion.
US has been doing that a lot lately. It's like they are envious on the Chinese government's power over its people.
Anyway, it's not banned in Thailand anymore, so US is just copying China and Russia now. Great role models there.
http://www.techinasia.com/bank-thailand-countrys-top-bitcoin...
Anyway, it's not banned in Thailand anymore, so US is just copying China and Russia now. Great role models there.
http://www.techinasia.com/bank-thailand-countrys-top-bitcoin...
I believe it wasn't actually banned in Thailand.
http://www.bangkokpost.com/business/marketing/395952/bitcoin...
http://www.bangkokpost.com/business/marketing/395952/bitcoin...
He never said he he was looking to copy China and Thailand because he believes their doing the right thing. He also lists many countries that have "issued warnings to Bitcoin users as their respective governments consider options for regulating or banning its use entirely"
His logic in banning it from this is because he does not want "Americans... left holding the bag on a valueless currency"
His logic in banning it from this is because he does not want "Americans... left holding the bag on a valueless currency"
[deleted]
He's later referring to them as "allies".
I hoped this is satire for a moment.
I hoped this is satire for a moment.
Good point!
You are not allowed to use twitter, facebook, and youtube in China either. So, just as our "allies", lets ban twitter, facebook, and youtube.
http://www.greatfirewallofchina.org/
You are not allowed to use twitter, facebook, and youtube in China either. So, just as our "allies", lets ban twitter, facebook, and youtube.
http://www.greatfirewallofchina.org/
Of course he called them "allies" - what else would you call your Most Favored Nation?
http://en.wikipedia.org/wiki/Most_favoured_nation#United_Sta...
http://en.wikipedia.org/wiki/Most_favoured_nation#United_Sta...
Serious problems with the following sentence:
It also means that Bitcoin provides a unique digital
fingerprint, which allows for anonymous and irreversible
transactions.
...
unique digital fingerprint >> anonymous and irreversible transactions
Because fingerprints have neve been used to identify anybody, and are also totally anonymous!
That's why the police never use them to solve crimes, of course.
That's why the police never use them to solve crimes, of course.
I find it incredible that the justification for action should be "a complete prohibition was appropriate because Thailand, China, and South Korea have already enacted severe restrictions or bans of their own." The American government has a document that outlines when it should take action and on what grounds. And that document makes no mention of consulting other countries or deferring to their sensibilities. It is outrageous that a senator thinks that that would be a valid starting point.
o lawd
Dumb move on his part, he better hope the price tanks before he is up for reelection again or he is going to be sorry he alienated so many wealthy potential contributors.
>A US senator is asking the federal government to take this remarkable step: completely ban Bitcoin.
Well, not that remarkable. Tons of countries (including the US) have banned alternative currencies in the past (and present).
Essentially, a government can ban whatever it likes, even essential freedoms enjoyed by everybdy for millenia (like drinking alcohol during the prohibition).
Well, not that remarkable. Tons of countries (including the US) have banned alternative currencies in the past (and present).
Essentially, a government can ban whatever it likes, even essential freedoms enjoyed by everybdy for millenia (like drinking alcohol during the prohibition).
> Tons of countries (including the US) have banned alternative currencies in the past (and present).
In the US, its worth noting, this is an express (in Article I of the Constitution) power of the Federal government.
In the US, its worth noting, this is an express (in Article I of the Constitution) power of the Federal government.
This just tells me that some very importand and/or well-connected people lost significantly because of MtGox.
At this rate, maybe this prediction[1] will actually come to pass.
1. http://www.businessinsider.com/williams-bitcoin-meltdown-10-...
At this rate, maybe this prediction[1] will actually come to pass.
1. http://www.businessinsider.com/williams-bitcoin-meltdown-10-...
Sen. Manchin's main constituent is the coal industry. Crypto-currency mining uses a fair amount of electricity. I'd guess most cryto-currency enthusiasts are also "green" enthusiasts. Manchin may want to stop this: "SolarCoin debuted last month and builds on the same technology as Bitcoin"
http://thinkprogress.org/climate/2014/02/21/3282131/solar-co...
http://thinkprogress.org/climate/2014/02/21/3282131/solar-co...
He wants to ban the use of a public ledger with private and public keys.
As a native West Virginian, I can tell you what will happen if you call his office. In about 4-6 months, you'll get this letter:
https://gist.github.com/dbb/5810717
https://gist.github.com/dbb/5810717
Some rather humorous responses on Twitter: https://twitter.com/Sen_JoeManchin/status/438762073527705600