The very idea that a random citizen in a modern country can invent their own notion of money is beyond problematic so it is confounding that this whole thing has been allowed to mushroom into what it is today.
Proponents like to drag skeptics into crypto debates but that is far off the mark when it comes to the real implications of the current situation.
Some questions to ponder:
When will the government decide it is illegal to create your own money? will those who have already amassed fortunes (even imaginary) be allowed to keep it? And if so why would the citizenry tolerate such a situation?
What about doing the same with currencies recognised in countries other than the one you're in, is that illegal?
[0] https://en.wikipedia.org/wiki/Rai_stones
[1] https://en.wikipedia.org/wiki/Shell_money
edit: the way I see it, you're advocating against the concept of trading.
Legal tender is perhaps the most important corner stone of a modern nation state, if an entrepreneur can invent their own money and subsume the one issued by a government then you don't have a government. I for one prefer having a government.
This is not a trivial issue as cryptocurrency proponents seem to think it is.
Nonsense. We've had non-political money before. During the free banking era we had thousands of bank-issued currencies that competed in an open market, and the state was alive and well.
The state exists as long as it has a monopoly on force within its jurisdiction. It doesn't need to monopolize the control of money and imprison anyone who has wrong-think about what they consider to be money.
I understand that a lot of people here don't like cryptocurrency and the get-rich mentality around it, but understand that when you call for laws to prohibit various uses of it, you're calling for people to see the inside of a prison cell because they have different ideas about what money is than you.
Legal-tender laws already prevent non-government currencies from subsuming fiat. Nobody is obliged to accept Bitcoin as payment of a debt, but they are obliged to accept legal tender.
And besides that, there will always be demand for fiat at least for paying taxes.
I don't agree having a non government issued currency means you don't have a government, for one there seem to be a few countries that use the Dollar or Euro as the de-facto currency.
It's radically different from allowing your defacto currency to be one managed by another country, particuarly one that has no common economic interest with yours.
Having alternative currencies doesn't obviate all the benefits of organized representation.
It does not even replace the nation currency unless you think that the national currency is so defective that citizens will collectively choose coins.
As long as they pay (using real money!) the taxes owed on the economic transactions carried using this alternative currency, I think they will be fine.
I'm reminded of Simon & Garfunkel's "The Boxer":
I am just a poor boy
Though my story's seldom told
I have squandered my resistance
For a pocketful of mumbles
Such are promisesI prefer for government to be wholly uninvolved in the matter of decided which assets constitute currency; it seems to me to be an utter conflict of interest.
Was following your argument up to that point. Making such a value judgment requires, in my opinion, a lot more data and deep analysis. Cryptocurrencies have the potential of loosening the grasp of oppressive regimes over their people. And it takes those other investors for the process to function.
But, the reality and therefore data is needed to judge whether these new currencies can deliver on that promise.
Edit: Want to clarify that I'm talking about *coin buyers/sellers. Not scam ICO backers. Agree that those folks are scum with negative value to society. If the parent was mainly talking about ICO scams, then please ignore my response and apologies for the misinterpretation.
A slight tangent -- you can't just take two options and say we don't have any data so we can't judge. We have a prior: most things do not have an effect in this case.
When the status quo is disrupted, it's perfectly reasonable to assume that it's a passing fad or won't work out. A product or asset, especially a radical step like cryptocurrencies, succeeding and being valuable is the exception, not the rule.
There's a reason accredited investors exist, because they're expected to know better.
The idea that cryptocurrency as a subject of trading changes that in any way is a claim which requires some substantial basis before it would warrant an exception to the general rules written into law.
>>the general rules written into law.
I'm arguing against the principle that we should ban anything not proven to be socially beneficial.
Why do you think that's how it works? Society is not a formal debate, and its members should be able to question any aspect of it at any time for any reason, whether or not they think they have a better idea. The entire concept of "burden of proof" is out the window here since many of its mores do not exist for rational reasons!
The claim that someone would prove, of course, would be that they provide value.
So that shouldn't offend you that the null position (and the position which satisfies occams razor) is the default stated position.
Instead of criticizing it, you could actually do the work of proving your claim that crypto has real measurable value to a society. Until that's proven, though...
It is trivial to prove the value, as people are using right now for this purpose.
How exactly would that work?!
There are also numerous projects to work around Internet censorship in the crypto space. Such as the Substratum Network (https://substratum.net) and Mysterium Network (https://mysterium.network).
The purported censorship resistance of these coins has nothing to do with the shape of the traffic.
There is empirical evidence that this traffic can and does get blocked. Furthermore, many cloud providers stop this traffic.
$65,000 worth of gold is the size of an iPhone X.
Oppressive regimes tend to control money flow in/out of the country. So if you, for example, have an aunt somewhere outside that wants to send you money -> you just might not be able to receive it, or would need to give some official a slice of the pie. Bitcoin obviously can help as u can just move the money without government oversight.
Acquiring this "wealth" of crypto would be impossible in an oppressive regime in the first place.
There were actually a few news articles about people in 3rd world countries that survived thanks to btc, though I can't find any at the moment.
Lots of people do person to person transactions.
OP was making a point about how easy it is to produce cryptocoins (in terms of both launching the software, and in terms of measurable capital cost to mine coins).
Coupled with the history of Bitcoin and what has predominately been the demographic attracted to an quasi-anonymous digital token for trading has been anarcho-capitalists who bought drugs and child pornography on TOR and silk road etc.
This comic sums up the point:
For the record, the SEC won't ban cryptocurrency. They want technology (in general) to stay here and potentially evolve into something that can be useful and provide jobs and value someday, so you can still free oppressed nations, but you will need to cooperate with the American government if it's being done on our soil.
Anything that can free people from tyranny must necessarily also be able to free them from the burden of obeying laws. The reasonable standards of conduct have to actually be built into the system in order for it to have a limit on what amount of external control is allowed.
Systems with smart contracts would be able to specify that a government actor could interfere--even retroactively--with any transactions that explicitly opted in to that jurisdiction. So you could sue someone over their Ethereum scam, and a judge could rule in your favor, and then a clerk forwards the order to the technical magicians for the digital circuit court, so that you get as much of your money back as is technically possible to recover.
If you don't opt in, you are in the land of caveat emptor, and the court tosses your case because it can't help you, even if you deserved it. Or people could opt in to private arbitration. But if someone wants their mathmoney to be outside the reach of government enforcement, it is necessarily also out of the reach of government protection. If you won't follow someone else's rules, you can't expect that your untrusted counterparty will follow them, either.
The first state to create a solid opt-in jurisdiction for network-based civil complaints will clean up, just as Delaware has for corporations.
The government has no obligation to clean up anything. Claiming otherwise is just an excuse to prohibit people from investing into high-risk assets.
>>common people like your grandparents and uninformed but good hearted relatives are providing liquidity for a growing number of new millionaires and billionaires
If the common good-hearted people are too stupid to control their own money, then they should be deprived of the right to vote and other semblances of legal persohood. What you're suggesting, which is to restrict the rights of everyone, is a disproportionate and illiberal response, characteristic of Big Brother states rather than free societies.
Sure they do. It's tasked with the ongoing operation and existence of the country, which can be threatened by economic instability. For example, Albania had a civil war literally over Ponzi scheme failures. https://en.wikipedia.org/wiki/Albanian_Civil_War
> If the common good-hearted people are too stupid to control their own money, then they should be deprived of the right to vote and other semblances of legal persohood. What you're suggesting, which is to restrict the rights of everyone, is a disproportionate and illiberal response, characteristic of Big Brother states rather than free societies.
Slamming "Big Brother states" while advocating for the removal of the right to vote and legal personhood is... special.
Albania is a lawless country where people are murdered across generations in ongoing blood feuds. In such a setting, any major social crisis can trigger a civil war. The solution in Albania is not to restrict private economic exchange. It is to institute the rule of law, by consistently prosecuting crimes like homicide, so that people don't think that extra-judicial violence is an appropriate response to disputes.
There is no chance that a cryptocurrency dropping in value in the West would trigger a civil war, because the rule of law presides in the West.
You're using the violence inherent to Albanian culture, that is independent of any financial phenomenon, as an excuse for putting cryptocurrency traders in prison.
>>Slamming "Big Brother states" while advocating for the removal of the right to vote and legal personhood is... special.
Obviously the comment was not meant to be taken literally, as evident from the comment right after calling the approach "illiberal" and characterisic of police states.
My comment was meant to equate advocacy for removing the right to freely transact with advocacy for the removal of the right to vote. Both are the natural implication of the principle that the subject is too ignorant, stupid, gullible, etc to be given full agency.
Think of it this way: you want the good hearted and gullible people to not be allowed to transact without gatekeepers, but you want them to have the right to vote, without gatekeepers to protect them from demagogues? That's inconsistent.
In other words, I'm saying if you really think the typical person is so incompetent that there should be laws to prevent them from investing into assets that have not been vetted by a government agency, then you don't have enough faith in their competence to give them the right to vote.
Incidentally, the poorest households spend 9 percent of their income on lottery tickets. The fact that this is not only legal, but promoted by state-funded advertising, yet investing in securities issued by non-public companies is prohibited, shows that protecting the public is not the real motivation beyond laws against purchase of non-public securities.
And yet, when millions of individual investors lose more than they can afford that's often what must happen to preserve the peace. If Bitcoin went to $100 today, at the very least we'd see a massive hit to unemployment and disability rolls.
I don’t think the facts support this. As big as bitcoin’s market cap is globally, it doesn’t actually appear to be causing a lot of employment.
Wealth effects are real [1]. Moreover, I know at least a handful of otherwise-intelligent individuals who used their credit cards to make leveraged Bitcoin plays. At the very least, they'll face collections and potentially bankruptcy as a result of the crypto crash.
Right now Bitcoin lacks the kind of leverage and interconnection with other asset classes that made the real estate crash have a big impact. In that situation, for example, you had banks running 30:1 leverage on some assets, which mean that a 4% decline resulted in a total loss of equity.
I agree. I do not believe the cryptocurrency crash will foment a global economic crisis. I do believe it will create temporary hardships for many Americans, hardships which will in some form flow onto state and federal balance sheets.
The stats I've seen indicate that essentially nobody owns bitcoin when you compare it to other commonly forms of wealth, like homes or traditional equities.
I think one estimate was that less than 500K people - worldwide - own more than one bitcoin, approximately worth $10K. Compare that to the US housing market, where there's 100M-odd homeowners with an average value of ~$220K. Let's say there's 200K bitcoin holders in the US with a bitcoin each, so that's ~2 billion dollars in value vs say 22 trillion in home assets, very rough calc. (And yes, some of those have a lot more than one bitcoin, but some houses are worth more than $220K, and the wealth effect tends to happen breadthwise, primarily.)
If there's no bailout at the taxpayer's expense, what do you suppose will happen? Riots? Revolutions?
Nothing will happen except millions of people learning a much needed lesson.
Would you share what government you reference?
This site likes to complain about wealthy inequality - common people like your grandparents and uninformed but good hearted relatives are providing liquidity for a growing number of new millionaires and billionaires to exit imaginary money who have provided less than zero benefit or service to our society and are leaving the country to avoid tax payments and taking money out of our economy.