With inflation at the rate it's at, I can't help but laugh at "crypto is so volatile!" That argument made sense in the endless bull markets - but these days? What's not volatile? I-Bonds?

The idea that the US Dollar is the eternal pinnacle of stability always seemed naive in principle, but now its clearly naive in practice.

It certainly could have been if our government didn't:

1. Unpeg it from a gold standard.

2. Use it as a geopolitical weapon.

The power and greed were too intoxicating.

Yes, because tying deflation and inflation to the rate of 'how quickly do we mine gold' is a brilliant way to run an economy.

Don't open enough gold mines? Here comes the deflationary spiral of death to strangle the economy. Too many gold mines? Inflation, inflation, inflation.

Can we do anything to dampen either one? Nope.

> 2. Use it as a geopolitical weapon.

Sure as hell beats getting involved in an actual shooting war.

This was exactly the history of the American economy in the 19th century. Rapid episodes of deflation would regularly bankrupt farmers, who couldn't sell their crops for enough to repay their loans.

> Sure as hell beats getting involved in an actual shooting war.

Until it backfires and creates the potential for a nuclear war.

Nobody's going to start a nuclear war over sanctions.

I'm not really sure why people opine about not using the gold standard.

Especially crypo-enthusiasts or even libertarians (I consider my self tangent to both these groups).

Gold is terrible for the following reasons.

* Supply is unknown so your market cap value is volatile to any sudden prospected windfall. This one is ESPECIALLY bad if you are a central government. Why would a central bank want to be beholden (with respect to purchasing power) to some random gold find that devalues the currency unexpectedly? (see wiki article about Mansa Musa who just went around destroying local economies because he just literally threw his gold around.)

* Gold is not very divisible, in that there are real costs to trying to divide the mint.

* Gold comes with high storage/security costs (especially if it is your currency back).

* Gold isn't really that transferable, the stuff is a pain in the ass to actually move around.

Gold has two things going for it.

1. It has manufacturing uses that provide real world value

2. Through out time people have a perception that it should have value. This perception spans across cultures and geography.

There's no opining about it. It was the best solution at the time and removing it eliminated the last remaining dam preventing absolute corruption of our money by the state.

https://wtfhappenedin1971.com/

I'm a Bitcoin maximalist and only a few notches away from an anarchist.

A website showing charts that demonstrate a shift in data since 1971 is not a conspiracy theory. That requires...an actual theory.

The collapse of the Bretton-Woods system was really bad. It got so bad that Nixon had to temporarily suspend exchange of notes for gold. It eventually dragged all currencies into a death-spiral. You can read all about it in the history books. Why should it be repeated?

The Austrian school of economics radically simplifies economic theory to an absurd degree (I assume that's what you're signalling you follow given your statements). It treats empirical evidence as heresy. The only driving force behind all of their conspiracy theories and racist/anti-semitic dog-whistling is a belief that governments are evil and all inflation is bad. It's really reductive and anti-intellectual.

Inflation isn't inherently bad and not all inflation is the same.

In terms of geopolitics the collapse of the Bretton-Woods system has had many benefits. Much of the world eventually recovered by the mid-80s by the economic crises of the late-60s. Also in the history books.

War and debt are bedfellows. Everyone knows this. Also well known are the economic consequences of creating such debt by going to war. It turns out mostly authoritarian psychopaths will go to war or make crypto-currencies official currencies despite the economic consequences and impacts it would have on their citizens.

> War and debt are bedfellows.

Because fiat enables them to be as much. If you can print money, you don't need public consent to go blow people out of the water, nor to justify obscene spending on the military. Every war the U.S. has been involved in since Vietnam has been a banker war, not a state war.

What's reductive and anti-intellectual is deluding people into believing that giving the government (or even worse, "economists" or central bankers) authority over their wealth is, somehow, going to multiply or protect it when we have ample examples to the contrary.

To your point, governments historically are evil and inflation is bad (it's arguably an inherent property of government as you're giving absolute power to the unproductive class). The idea that it's not (MMT) is the rationalization of a failed economic strategy that's put everyone's well-being in the crosshairs.

The idea that any of that is untrue is a result of unrelenting propaganda and indoctrination (or, in certain cases, someone who has directly benefited from the scheme). Any way you shake it, to think that what's happening isn't the result of malfeasance is denial, wholesale.

Mayer Rothschild codified the potential for this way of thinking with his Economic Inductance theory:

> Currency, or deposit loan accounts, has the required appearance of power that could be used to induce people into surrendering their real wealth in exchange for a promise of greater wealth (interests). When applied gradually, the public adapts to its presence and learns to tolerate its encroachment on their lives until the pressure (psychological via economic) becomes too great and they crack up, depending on their resilience capacity.

Flip on the television if you need insight into what people do when they "crack up."

It sounds to me like you believe in conspiracy theories about finance and banking and the threatening powers that control them. I suppose you also take Ezra Pound's later obscenities about global finance and the reasons for war to heart. And therein lies the problem with the goldbug: the path to fascism.

All inflation is bad is a highly reductive argument. It is much more complicated than that and most economic models indicate that a certain amount of inflation is a good thing for overall growth. This is why, in the US, the Federal Reserve targets 2% inflation. There are a lot of positive effects to inflation and trying to control it so that it grows moderately is a good thing. There are decades of research as to why this is the case even though I suspect it won't sway you I suggest you try reading it if you are seriously interested in educating yourself about what you're talking about.

Do I believe the current economic conditions are the result of a scheme among elite bankers? No. A conspiracy involving more than two people is not sustainable and not a conspiracy. Financial regulation is managed in most Western countries by democratic representation. In the US they created the Federal Reserve system. If you want to see what they get up to they publish their board meeting notes, research, reports, results of votes, etc. It's open information.

If Americans have a problem with the system they're free to vote for representation that will introduce laws that will change the way the Federal Reserve is run... although in my experience very few people even know what the Fed does or that they have a website.

I don't need the thought experiments of a long-dead banker who didn't live to see the formation of the Federal Reserve. The quote you're citing is antiquated. Banks today don't make money on deposits like they did in this Rothschild's day and people aren't worried about runs on a bank's reserves anymore.

Although if they're invested in crypto via Tether or any other stable coin they ought to be.

I'd offer a less technical criticism on the economic and monetary system you defend.

At the end of the day, now matter what happens, somehow the system always calibrates to ensure that the typical human being is a wage slave for life. Spectacular improvements in productivity and technology are somehow never returned to the worker, the system then just increases the cost of living, or creates new jobs, many of no real purpose.

It's a system to both maximize work and consumption, which is as anti-economical as it gets. It's also a system that crashes when it doesn't grow. It's also a system that completely ignores every externality and wrecks everything in its path.

But yes, I'm sure you're right that from within this system, everything you say is technically correct.

I'm not defending it as a perfect system.

I am criticizing the implication that the banking system is run by vast conspiracy and that the gold standard was a better system.

> For we are opposed around the world by a monolithic and ruthless conspiracy that relies primarily on covert means for expanding its sphere of influence--on infiltration instead of invasion, on subversion instead of elections, on intimidation instead of free choice, on guerrillas by night instead of armies by day. It is a system which has conscripted vast human and material resources into the building of a tightly knit, highly efficient machine that combines military, diplomatic, intelligence, economic, scientific and political operations.

> John F. Kennedy, 1961

What does that presidential address have to do with goldbuggery?

Kennedy was talking about the Cold War and the need for and limits of secrecy in governance during times of war.

> It sounds to me like you believe in conspiracy theories about finance and banking[...]

Yeah, dude.

> Do I believe the current economic conditions are the result of a scheme among elite bankers? No.

You're their ideal customer.

> A conspiracy involving more than two people is not sustainable and not a conspiracy.

You, like many people, highly underestimate the role of hierarchy in a conspiracy. The people at the top don't have to tell you it's a conspiracy or explain why they're having you do what you're doing. They just say "hey, manager, go do this" (who wants to keep their job and will do something, even if it's irrational) and then that edict trickles down till you get to a lower-level worker who's only concern is "will I get my paycheck?"

It's why it's possible and why it works. Most people are timid cattle that are deathly afraid of their "superiors" and this logic enables psychopathic behavior quite well. Couple that with folks like yourself who are desperate to explain away evil in the world and you have a pretty kick ass machine for corruption.

> The quote you're citing is antiquated.

Who decides that? You?

Decide for yourself. Mayer Rothschild died 100 years before the creation of the Federal Reserve. Banking in his time was extremely different.

Monetary policy in the US is federally regulated by the Federal Reserve. Their meeting minutes, votes, etc are all public information. We all benefit from this regulation. Because of it, banks are forced to disclose their finances as part of their SEC filings. Ever notice how they claim to care about the environment and the Paris Agreements and yet their investments in oil and gas have increased in the last couple of years?

Some people have because regulation does work some times.

Yeah, instead it's manipulated by an entirely different set of equally nefarious actors! We did it, everyone!

You don't understand how Bitcoin works, and that's okay, but you need to do your homework before you make foolish comments like this.

Bitcoin's supply is regulated via a timed algorithm, meaning, it doles out an increasingly diminished amount of Bitcoin on a pre-timed cycle that will end in ~2140. In order to get that Bitcoin, "miners" need to perform work (via calculation of a nonce which as an auto-adjusting difficulty of computation—the "proof of work") that can't be faked or manipulated.

The beauty of that is that, unlike a central bank, no one can go and change a variable in a database to say "omg we have more money now!"

Looking at how Bitcoin's price has fluctuated over the years, it should be pretty obvious by now that manipulating, inflating, and devaluing a currency doesn't only happen through releasing new notes. Bitcoin isn't immune from manipulation just because the supply is pre-decided.

Bitcoin's price has fluctuated because of the same market dynamics that play out everywhere.

Most people are panicky and hair-triggered, very few are patient. Especially with a new technology that has the potential to make outsized returns early on, of course, you're going to get a lot of gamblers entering and exiting the market.

This is why you see dips when headlines like "China bans mining!" or "Crypto is doomed, look at Luna!" are printed. It conflates things and uses people's ignorance against them (not unlike traditional financial markets/instruments).

Correct, and all of that stuff is subject to manipulation, often by powerful actors behind the scenes or by grifters playing off of people's insecurities, fear of missing out, etc...

Controlling the supply of a coin does not mean the coin's actual value can't be manipulated by dedicated actors, and in the case of cryptocurrency, the "mystique" of the tech behind it, the ease of creating new systems on top of it that are complicated for ordinary users to understand, and the general fear people have of missing out on a speculative investment (as well as the general fear they have that they might be in a speculative bubble) make coins like Bitcoin particularly vulnerable to specific kinds of social manipulation, scams, and phishing, all of which end up affecting the price of the coin.

The fed can't release new Bitcoins, sure, but in exchange, now random celebrities on Twitter can cause sell-offs and spikes in value; random Discord groups can pump coins so they can sell off and make a profit before they crash. You haven't gotten rid of currency manipulation, you've just changed who's doing it.

> The fed can't release new Bitcoins, sure, but in exchange, now random celebrities on Twitter can cause sell-offs and spikes in value; random Discord groups can pump coins so they can sell off and make a profit before they crash.

This is why anything that isn't Bitcoin is referred to as a shitcoin, and why the conflating of Bitcoin with everything else is so problematic. The former is designed to prevent that manipulation, the latter leverages it.

Then we get back to looking at Bitcoin's price chart, and I still think looking at the level of volatility in Bitcoin's price over time shows that it is not really immune from the kind of manipulation you're saying it resists.

I mean, if nothing else, shitcoins crashing/spiking regularly cause Bitcoin's price to adjust as well. Tera isn't Bitcoin, but that didn't make Bitcoin immune from volatility when Tera's price crashed; the manipulation techniques that work on shitcoins seem to fairly regularly have knock-on effects on Bitcoin as well.

I don't buy that social manipulation has no influence on Bitcoin.

The focus on price relative to USD is too short-term of thinking. The reason I hold the opinion I do is related to scale. A system like Bitcoin if adopted at a standard-level (i.e., long-term prospects) would not see fluctuations in price because it wouldn't be able to—the market would naturally stabilize as people would be able to use it to pay bills, buy groceries, and the sheer scale of the market couldn't be dictated by a single "whale." Technically that can happen today, but there's a massive psychological gap that needs to be crossed.

> The focus on price relative to USD is too short-term of thinking.

What is the incentive for Average Joe to use BTC for transactions while USD exists?

For the average Joe? Nothing. Just like there was no incentive to use Facebook when MySpace existed.

The average Joe will be the last person to use it daily, just like every other technological invention. That's why they're average.

I'm curious how you expect Bitcoin to obsolete every single alternative currency/value-store we have today including longstanding systems like gold, when you're telling me that Bitcoin's price stabilizing is reliant on it being the only possible currency that people can use.

> I'm curious how you expect Bitcoin to obsolete every single alternative currency

I didn't say that.

> you're telling me that Bitcoin's price stabilizing is reliant on it being the only possible currency that people can use

Nor did I say that.

---

Obsoletion of the incumbent options will come through a few means:

1. Hyperinflation (where I think we're headed). Basically, what happened in Germany in the 1920s. Instead of a Rentenmark, though, we'll get CBDCs which are a hyper-limited, state-issued digital currency that's used as a political weapon. They'll give it to people for "free" to encourage adoption (because they can mint as much as they want) but not tell them that it expires or can't be used for certain purchases the regime disagrees with. This will create a financial caste system where free/wealthy people use Bitcoin and the proletariat use the CBDC (i.e, they become slaves of the state). I think this is most likely as state power will fight to the death to not give up control of money (that's their only control against the people) but they will tolerate an "elite" class that can bribe their way out of control.

2. Natural transition. As more options for accepting Bitcoin (e.g., if Square/Block add lightning payments to their terminals, circumventing Visa/MC/etc.) become available and people understand it, they'll be incentivized to use it via discounts, perks, etc. Think early days of "order online" and how a lot of people scuffed at that.

> 1. Hyperinflation (where I think we're headed)

It would be unfortunate then if there was a large amount of evidence that Bitcoin's price was partially tied to the stock market's health, and that global volatility and market issues in general affected the value of cryptocurrency just like they affect the price/value of everything else.

> 2. Natural transition

I think this is what a lot of us are getting at; Bitcoin as it stands is worse at transactions then pretty much every other currency and platform today. It's not competitive with those platforms for most people. That's not to say that it has no usecase at all, but for mass-market adoption and for the average person's use-case, Bitcoin is an awful transaction method.

So when people tell me that I need to think long term, I'm curious how they expect to get to the long term given that in the short term Bitcoin is basically awful for mass-market usage and isn't going to be adopted by ordinary people for ordinary transactions until after its fundamental problems like volatility are solved. So it all feels pretty circular.

You're telling me that stabilization requires increased use. In your words, "a system like Bitcoin if adopted at a standard-level (i.e., long-term prospects) would not see fluctuations in price because it wouldn't be able to".

I am telling you that Bitcoin won't get increased use if it doesn't (at least) stabilize. So it doesn't really matter whether Bitcoin would have fluctuations at that point, because nobody who's not a speculative investor, dedicated to the cause, or an extremely niche user wants to deal with the fluctuations in order to use it as a currency today.

You need to be more accurate in your language.

Bitcoin's supply cannot be manipulated, unlike fiat. The currency pair BTC/USD is very much manipulated, as is pretty much any asset paired to USD.

These are two different concepts.

The effect of those concepts are the same, and pretty much no end user cares about the difference.

And it's worse than just that the currency pair BTC/USD is manipulable. USD prices have a loose mapping to actual value, the relationship between BTC/USD isn't just arbitrary numbers. It's not just that the exchange rate between BTC and USD is changing, independent of the USD the actual market value represented by a Bitcoin is changing.

In other words, you do not need to manipulate the supply of a currency in order to manipulate the amount of purchasing power or value that each "unit" of that currency represents.

Bitcoin proponents often try to bring up supply manipulation like it's some kind of unique category, but it's really not. Currency manipulation does not require control of the supply.

The supply part is the long term value, similar to gold.

Bitcoin's price relative to the dollar fluctuates, but it can't be inflated.

The purchasing power of a Bitcoin changes. That's the only thing an end-user cares about.

Do you think that people care about inflation because there are more dollars in existence? No, they care because they can't make the same level of purchases with the dollars they're holding.

Bitcoin's price relative to the dollar indicates what you can buy with it; when that price changes it's no comfort to people that technically the same number of coins exist. They care about what the coin is worth, and Bitcoin's worth can be manipulated regardless of what its supply is.

Tether exists, and turning the magical Tether printing press on and off is how BTC is manipulated.

If Tether collapses, you can certainly expect a panic in all cryptocurrency markets, but it has no direct means of manipulating Bitcoin.

Only 6.02% of their reserves are held in "digital tokens," the rest are held in traditional assets and cash: https://tether.to/en/transparency/#reports (scroll down to "Reserves Breakdown").

- "you can certainly expect a panic in all cryptocurrency markets"

- "but it has no direct means of manipulating Bitcoin."

How do square these two parts of the sentence? The ability to cause a panic in the Bitcoin space on command by crashing another cryptocurrency sounds a lot like manipulation to me.

Direct implies that you can manipulate Bitcoin at the protocol/technology level.

These are indirect effects as they are events that occur outside of Bitcoin but cause people who have Bitcoin to sell or trade it.

You can cause panic in traditional finance markets, too. It's the exact same principle at play.

As an end user, why should I care about a technicality over how exactly someone is manipulating a currency that I own? Why does it matter whether manipulation is direct or indirect?

If the claim is that Bitcoin is only immune to specifically direct manipulation (where direct is a narrow sub-category of manipulation techniques), then... sure, maybe that's true, but it's also not that impressive and doesn't change all that much about the end-user's risks, since the more general forms of currency manipulation still seem to be entirely possible.

> You can cause panic in traditional finance markets, too. It's the exact same principle at play.

I don't think that's being debated, people are just pointing out that Bitcoin's price can be still be manipulated by powerful actors.

Bitcoin's price, yes, but not the actual currency itself. That will be the major psychological void to fill in for people: thinking about Bitcoin as a currency, not an investment or gambling device.

I expect that to take decades as the government/media are and will continue to attack Bitcoin and influence public opinion as it directly interferes with their business model.

Two things. First:

> Bitcoin's price, yes, but not the actual currency itself.

Again, as a user, who the heck cares? The Bitcoin in your wallet changes how much it's worth, it's the same outcome as normal currency manipulation. If the effects are the same, and the changes to the value of the currency are the same, then the specific details about how that effect was caused don't matter to end users.

Second:

> That will be the major psychological void to fill in for people: thinking about Bitcoin as a currency, not an investment or gambling device.

I just finished talking to someone a day ago on this very site who argued with me for ages that Bitcoin was a store of value and shouldn't be thought of a currency and accused me of not understanding the history of the coin because I pointed out correctly that many early proponents of Bitcoin were pushing it as a currency for regular everyday transactions.

And I am so not willing to have the same exact conversation a second time just with the the details and direction swapped out. All of these arguments always being with, "hah, people should research Bitcoin more before criticizing it", even though everyone in the community who says that is constantly making contradictory claims while arguing that they represent some kind of community consensus or coordinated effort.

But to summarize the problems with the specific claim being made this time around:

Bitcoin is bad at everyday transactions for a dozen reasons that have been already explored in depth over and over again in the past and that are easy to research. If your goal is to make an everyday transactable currency, Bitcoin is a bad choice for that, for obvious reasons -- even without getting into the technical reasons why a deflationary asset is in general a bad fit for transactions, all you need to do is look at the history of Bitcoin's price; that's not a chart that indicates a healthy currency intended to be used for normal purchases. Honestly, the characterization of Bitcoin as a rarely-transferred store of value is a stronger argument, and even that isn't a particularly strong argument.

First BTC has to do better than USD at transactions. It clearly isn't there now, and I'm not sure I see a path where it achieves that. USD will continue to exist as long as the US Government does, and if that falls, then, well, I've got other problems more pressing.

Stock markets aren’t manipulated at the technology level either - it’s large flows of capital, insider trading, pumping dumping, and other shady business.

> but it has no direct means of manipulating Bitcoin.

Imagine I am the director of Tether.

I print $1 billion in Tether out of thin air.

I then buy bitcoin with it on a UST/BTC exchange.

Bitcoin price goes up.

That's not a direct means of manipulation.

Direct or not, in that scenario the Bitcoin price is still being artificially increased for the benefit of a private malevolent actor.

If you want to call that something other than manipulation, then :shrug:, more power to you. But my main takeaway is still going to be that banannaise's original comment seems to be mostly accurate.

> But my main takeaway is still going to be that banannaise's original comment seems to be mostly accurate.

I'd highly recommend taking the time to rethink that position. The systems being implemented now will permanently enslave you. Bitcoin is the only escape. And no, I'm not being hyperbolic.

> The systems being implemented now will permanently enslave you.

Recognizing that there are significant problems with current financial systems does not automatically imply that Bitcoin in specific is a reasonable or feasible alternative to those systems.

Candy bars are unhealthy for me, and I can recognize that, but that doesn't mean I'm obligated to eat dirt. In other words, it's not enough for Bitcoin proponents to point out that traditional fiat systems have problems, they need to prove that Bitcoin meaningfully solves those problems or improves upon them. All of you've done so far in this thread is argue about how narrowly people should apply the word "manipulation", you haven't demonstrated that banannaise's original comment is wrong in a way that ordinary currency users would care about.

I think most of the real-world evidence we have shows that Bitcoin and other cryptocurrencies are just as manipulable as existing systems regardless of whether or not they have a fixed supply, and in fact are currently somehow impossibly managing to be regularly manipulated to an even higher degree than existing fiat systems.

> you haven't demonstrated that banannaise's original comment is wrong in a way that ordinary currency users would care about.

I already did but you didn't like my answer.

You replaced trust in a bank with trust in this centralized service.

Where's the merit?

In this particular instance, yes. With this specific use case, there isn't. But adoption of Bitcoin in general is a net positive (I think of something like these notes being a gateway drug to self-custody).

Adoption of Bitcoin is a net positive on the CO2 being added to the atmosphere for sure.