There are multiple exchanges all around the world that compete for the business of customers and innovating in a break-neck speed, none of which would even exist if there was government regulation. Bugs are fixed and problems are addressed faster than the average legislator can spell "malleability".
It would work even better if there was less regulation and investors could fund exchanges in the US without having to buy a bank, so that development could actually happen everywhere and not only in Japan and Slovenia.
Straw man alert; no one claims bank regulation is perfect or will stop all bank failures.
Regulation can work, however it should not absolve users of responsibility for vetting their investments or financial service providers.
The time between a bad actor starting to fleece people and the market or regulation wiping them out can still be fairly lucrative for the bad actor and fairly damaging for the public.
Lack of regulation means that others learn from their misfortune.
Quite how you manage to link it to be a result of a "truly free market" is beyond me.
With Bitcoin the entity holding your assets and operating the trading mechanisms are generally the same company. This leaves a customer in a weaker position and could allow the exchange/brokerage/bank to get away with shadier practices. They can do things like delay the execution of a transaction until it better benefits them. Or they can unillaterally suspend the ability to withdraw funds with no advance notice, just as what is happening here.
Edit: You of course do not get the funds in the case they are credited back to the original person at the end of the 3-5 days, you do probably get a fee for trying to deposit a bad check though!
At the end of the day I don't have access to my money, or I have to call their "customer support" and spend hours explaining the problem that they created.
If the bank goes down completely (as in: goes bankrupt), my deposits are only guaranteed by the state up to a certain limit, which isn't that high.
Regulation and "liability" buy me very little in real terms.
Large banks do have bugs, and sometimes even admit it. [0][1]
The fractional reserve system basically means if there is a problem, you need to be the first at the counter. If you are not, you will only get a certain amount of money back.
[0] http://www.telegraph.co.uk/finance/2737388/Bug-crunches-Hali...
[1] http://www.independent.co.uk/news/uk/home-news/lloyds-bankin...
Edit to add: (But not quite the same as the one above)
http://www.dailymail.co.uk/news/article-2426519/Gang-arreste...
http://article.wn.com/view/2012/06/26/Lloyds_TSB_computer_gl...
In any system with deposit or investor insurance, e.g. the United States, you will get back the full insured amount (up to $250 000 for bank deposits, $500 000 for investor funds). Beyond that you will be treated as the senior creditor that, as a depositor or investor, you are. If you want more certainty as to the return of your capital, buy Treasuries.
I probably should have mentioned I am in the UK. You get back up to £170k here ($280k) but I guess my point still stands :-)
Edit: (Oh, that's for a married couple by the way. £85k if you're single.)
Stop, you're killing me here.
I suggest playing with Dogecoins. It is beginning to become serious, and their community prefers to stay out of this political nonsense.
Dogecoins took some practical things and made them better. No ASICs exist yet for Dogecoin, so its still possible to mine them on normal computers. 1-minute block times means they're much faster than Bitcoins, and its refreshingly silly that people are sending each other thousands of DOGE at a time. (current exchange: $10 == 5,680 DOGE)
So it is ridiculously easy to get yourself thousands of DOGEs to play with.
Q
Remember, SHA256 was designed for speed... and easily made into a hardware implementation. SCRYPT however, was designed to be slow and explicitly designed to be difficult to implement on ASICs (its possible of course, just harder).
-------------
As for the 1 minute box, if you want security, just wait for 10 confirmations in DOGE. If you want speed, you can wait for 1 confirmation. Faster confirmations are strictly more flexible than slower confirmations.
https://alpha-t.net/product/scrypt-asic-miner/
In comparison, your typical R9 290X is hitting 0.8 Litecoin MH/s in 300 Watts.
Your typical Litecoin ASIC Miner is ~26x more power efficient than a GPU.
The 290x hits ~850 MH/s with Bitcoin at 300 Watts. But ASICs will soon hit 600,000 MH/s at 300 Watts. http://www.butterflylabs.com/monarch/
Basically, BTC ASICs are 700x more efficient than GPUs. LTC (and other SCrypt ASICs) are expected to only be ~20x more efficient.
By making ASICs less efficient, it keeps more of the control of network in the hands of the individuals. SCrypt is the better hashing algorithm for ANY self-proclaimed libertarian, who wishes to remove power from the ASICs that have taken over the BTC network.
So we've got a system that allows for greater ease by having the potential for a 1-minute confirmation, vs a system that FORCES you to always wait 10-minutes.
The system with 1-minute confirmations can always wait for multiple confirmations to increase security. But the system with 10-minute confirmations is forced. Instead, you have tons of sites that wait for 0-confirmations!!
One system is more flexible than the other and solves a pressing need in the core system. Whether you like it or not, DOGE has learned from BTC's mistakes and is improving upon the status quo.
I don't think DOGE is perfect quite yet though, maybe a few more "fun" currencies will come and go before we stick with a winner. But it is clear to me that BTC has too many core issues at hand for it to be the cryptocoin of the future.
The thing with bitcoin is that it is a software protocol, you don't have to apply politics to it. That is like saying TCP/I has a leftwing bias.
Anyone who has studied ethics understands that technology can have political leanings. Robert Moses's Bridges for example, were designed so that African American's would be unlikely to enter certain parts of New York City.
A Bridge in of itself is not pro-segregation or anti-segregation. But when Robert Moses used bridges to block bus traffic to certain areas of New York City, they were being used as pro-segregationist tools.
Technology is NOT politically agnostic. Only the naive or uneducated can believe that.
-------------
DOGECOIN's politics have been explicitly stated. It wants to be a fun and easy coin for people to get into. It is unlikely to last very long (the 100 Billion DOGE soft-cap will be hit rather quickly), but they hope to learn a lot about coins in the meantime.
Bitcoin's politics have been decided as well. Libertarians are beginning to wield BTC as a way to push their values.
I'm simply stating that one of these communities is much funner to work with. Keeping coins "fun" and "easy" resonates with me a lot more than the typical libertarian I hear about BTC.
I agree that would certainly be nonsense.
But any technology project most definitely can implement the ideological beliefs of its creators, if it's designed to do so and succeeds in achieving that design objective.
For example, the World Wide Web was developed to facilitate sharing, exchange and collaboration.[1]. You might say Tim Berners-Lee did have certain belief system and that he did implement those in his design.
[1]: https://en.wikipedia.org/wiki/History_of_the_World_Wide_Web#...
Who would disdain to subscribe under this flowing banner?
Instead of greedy speculators who are willing to pump and dump or crash the economy to make money off of the ignorant?
Sometimes, the market does not figure it out... especially with a populace that is imperfectly educated (and not "perfectly logical, perfectly rational" beings in most theoretical economics)
But even with perfectly logical and perfectly rational beings however, there still are market failures. And it is up to the population to create Governments to deal with these market failures. (Usually through deregulation or regulation)
Case in point: LEXG, a 2010 stock that is widely considered "pump and dump". Despite all the regulations, and centuries of knowledge of pump and dump... it still happened.
BTC itself has a growing volume of trade... but a lot of smaller cryptocurrenies are simply pump-and-dump schemes.
Do you think we'll always have an "imperfectly educated" populace? Do you consider yourself part of that sector of society?
Its well known that economic models of "free markets" fail instantly on the first assumption. We are not perfectly rational beings with perfect knowledge.
And yet, a number of "free market" arguments are based upon this fact.
That's not really an if, it's a simple fact that has and probably will always be true.
> why let them elect representatives
Because millions of idiots turns out to be better than kings and dictators for the average quality of life.
Any form of "removing idiots" from the voting pool will give comparisons to the Literacy Test, and you will be literally compared to a slave-driver. http://en.wikipedia.org/wiki/Literacy_test
False dichotomies are the bread and butter of politics. Perhaps if you knew the history of this country, you'd know that you aren't gonna get very far on this subject.
I welcome you to try, but from a political / historical point of view, there is too much bad blood in this discussion for people to discuss it sanely.
But the point we're trying to make here is philosophical, not practical: If people are too uneducated to participate in a free market economy, why do we allow them to vote?
An organization who controls who and what votes is far scarier than letting idiots vote. We in America have destroyed any organization (government led, or whatever) that attempts to limit the number of voters.
Mind you, who should decide who can and can't vote? The free market? The Government?
The answer is no one. The right to vote is considered sacred and that is a good thing. No one can or should deny others the ability to vote.
EDIT: I'm surprised that I have to lecture you on this. I thought you were a libertarian? Aren't you all for personal rights and liberty? The freedom to vote is absolutely essential, and a holy right regardless of your political background.
But it is THAT much more important if you're a self-proclaimed libertarian. Personal freedom is the king of the Libertarian philosophy.
That isn't a natural right. That is born out of the system of governance that we've decided is best. There is no natural right to vote — not in the same way we have a natural right to speech or defense or anything else of that manner.
Democracy is dangerous. Our founding fathers despised true democracies, which is why they founded this country as a Constitutional Republic, and notably one that not everyone could vote. Many call them racist and sexist, and no doubt that was part of it, but they also understood that having a bunch of uneducated people voting could be disastrous. NO ONE should be allowed to vote your natural rights away, yet you see this in democracies all the time. You're right, though, the trick is figuring out an acceptable way to proof voting privileges.
Even the word "democracy" didn't come into popular use until the progressive era.
So yes, when we follow true Constitutionalism, voting is important because we should be selecting our leaders to uphold that limited government. But in our current system, we've given government so much power that we allow people to elect leaders that are going to give them the most, all whilst selling off the power they have taken from us to companies that want to protect their business model.
And once again, you really need to stop doing the whole, "I'm surprised you aren't smarter" bit.
Your own argument against voting defeats your own statement. You don't even trust your fellow citizen the right to vote, and yet you believe that citizens are smart enough to "route around damages" being done to the economy.
Listen here. I'm the one bringing up anti-market and pro-communist points against you. The fact that YOU are the one who wishes to limit voting is deeply ironic.
Democracies are anathema to anarcho-capitalist societies, because NO ONE should be able to vote to force you to do something you choose not to. Again, this is the pure governance/political theory I'm using to explain why I'm not being ironic in my thinking.
I never said I had thought of a good way to test voting. I only said that I thought it strange that we were attacked for suggesting that we even think about it — particularly when this "right" to vote is actually only a privilege granted by our various constitutions, and not a true, natural right.
Either you have an answer or you don't. The history of the U.S. is completely irrelevant to this question. I don't live in time when blacks couldn't vote or women couldn't vote, it's irrelevant to the conversation what the U.S. used to be or used to do.
Perhaps your panties are in a bunch because you think I think you're advocating a return to monarchy; I don't think that, so let it go. I think you're advocating for a return to the 1800's view of the constitution because you think it was a golden age of freedom before the federal government got so powerful. This is a typical anarcho-capitalist view and one I also disagree with.
However, trying to prevent people from voting is authoritarian whether it's from a king or from a congress and I won't support it under any circumstance. The people would certainly never vote to remove their right to vote.
FYI, you're making a logical fallacy, an Argument from Ignorance.
Ignoring your second part. (But I'm guessing you'll focus on this rather than my first sentence.)
-- Declaration of Independence 1776
The words "Natural Law" and "Natural Rights" only makes sense in the philosophies of John Lock, which inspired the Declaration of Independence.
The ability to alter and change governments has been declared as a Natural Right in the declaration of independence.
Aside from that, "Natural Rights" don't exist. They are a concept created by our founding fathers to attempt to unite the nation. If you disagree with the founding father's definition of "Natural Rights", then the concept is dead and there is no point continuing to talk about the matter.
After all, like everything else that has been created by humans, these concepts are all imagination and fiction. Natural Rights do not exist in the real world, they are merely a concept created by people hundreds of years ago to attempt to unify this country.
Basically, a "Natural Right" is simply the rights that the United States of America were founded upon, the foundation of our Constitution, the foundation of our Revolution, and the foundation of the philosophies that created this country.
These rights are not shared with other countries, these concepts do not exist in other hypothetical governments. "Natural Rights" are simply the rights our founding fathers believed in. Nothing more, nothing less.
You're leaving out entire swaths of the DoI that explain where natural rights come from. But I find it interesting you pick part of the document to argue for what you want, and then try to lecture me about your own philosophy of where the rights come from.
-- Declaration of Independence 1776
I do believe that the Declaration of Independence ALSO leaves its explanation out. It declares the truths to be self-evident, and fails to elaborate upon those facts.
The term 'natural right' is nothing more than a glorified circular argument, embodied within the founding papers of our Government.
So you can either hold those truths to be self-evident and agree upon our founding fathers, or you can disagree. If you disagree, we will be unable to proceed with this debate however...
Just finish off that tid-bit of quote you pulled, and you'll find they specify exactly where they come from — a Creator. Whether or not you believe in a Creator might determine whether you reject natural rights, but for those of us that aren't so quick to reject God, then there's a sound basis for believing in them.
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness."
All philosophies have their pros and cons. Learning to pick which philosophy is an art. Personally speaking, I keep Capitalist AND Communist arguments in my brain. I'm ready to use either philosophy to prove whatever point whenever I want.
For example, if you were a Communist, I'd deride the "free market" by talking about Bourgeois and the working classes. (But that wouldn't work on you, because you'd instantly think that I'd be creating a "class war").
All of these philosophies are theoretical anyway. The real purpose of them is to give us the ability to understand what other people are talking about. Furthermore, it has been proven that ALL pure systems are imperfect.
Free Markets have their market failures (Monopolies). Communists fail to allocate resources effectively.
The solution therefore, is to pick and choose the philosophy that works in the right situation. Be a more educated man, and open to different ways of thought.
I'm really curious where and when this 100% free market system existed that was proven unworkable. Because from my understanding of history, we've only ever had government.
ZERO monopolies have become what they are/were without help from the government.
Perfectly theoretical free markets, with perfectly educated populations with 100% perfectly rational beings will be unable to solve the externality problem. http://en.wikipedia.org/wiki/Externality
It is known and proven. Do not give me a "Well, we'll figure it out later" bull... tell me how a free market is supposed to resolve an externality (which by its very definition is unresolvable by free markets).
Perfectly rational and greedy actors will always offload their costs onto unwilling parties. It is the job of the government to ensure that costs align up with the actors who create those costs.
If that is too theoretical for you, imagine two cities. "City Upstream" and "City Downstream" both are on the same river. City Upstream begins flushing their sewage into the river, and so City Downstream is no longer able to drink the water.
Solve this issue using only rational actors in the free market. The "Government" solution, is to have the Federal Government create Water Treatment plants, and then force "City Upstream" to use them. Afterwards, you tax both cities to pay for the treatment plants.
Your turn. Come up with a free market solution without the use of a central government or centralized 3rd party. Assume both cities are perfectly rational and perfectly selfish, as is common in these economic problems.
Good luck coming up with a solution. But if you're like any other libertarian who I've issued this challenge to, you'll probably run away.
What happens without a government? City Downstream chips in for a bunch of guys to go up there and beat the shit out of the owners of that factory. Let's assume a scenario in which all citizens of City Upstream work for that factory, so they all want to keep their jobs and so they all chip in for a bunch of guys to protect them (or a company hires those guys on their behalf). Now, those guys meet up. Are they going to fight? Highly unlikely, because it is in their personal self interest to resolve this conflict peacefully AND collect the money from the people who hired them. What are they gonna do? They're gonna compare the balance of power. If it's equal then they're gonna settle for the solution that satisfies both equally. If City Downstream, which obviously is concerned with its health more than City Upstream workers are concerned with keeping their job, hires more tough guys, the balance of power would be in its favor and thus you can expect more drastic measures to be agreed upon. Then remember, we talked about an edge case, when all citizens of City Upstream work at a factory. However, that is very unlikely. Thus it may turn out to be that one factory would be up against the whole city.
Of course in reality, no one would actually hire tough guys, but rather such conflicts would be resolved through more civilized private protection agencies and courts. The central question is who outbids whom and to what degree. And the answer is that if the majority of people want something enough to pay for it, it will always outbid the minority, however rich this minority is.
You don't need no government to solve externality problems. All you need is to stop thinking that some magical entity, simply because you can vote for it, is able to resolve issues that are truly complicated.
FYI, a little global perspective. What happens in "the real world" is that your country loses its rivers and millions die to sewage born illnesses.
http://www.spiegel.de/international/world/dead-rivers-and-ra...
Go fantasize about private protection agencies and courts that don't exist and preach it to the 3rd world. Neither exist in India and millions die to this very problem I've been describing.
Perhaps if you stopped believing in pure theoretical fairy tales (wtf? Private Protection Agencies? They don't even exist.) and looked at real world problems, you'd know.
The Ganges river has 2 Million people ritually bathing in it every day due to Hindu tradition. It has over 400 Million living by it as a potential source of drinking water... and it carries some 80% of the Indian untreated sewage.
Tell me, how long will it take for a "Private Protection Agency" and "Court System" to stand up automatically in those Indian villages? People don't even understand the concept of pollution. The reality is, "City Downstream" may not even know that "City Upstream" is the cause of their problems.
India's government isn't powerful enough to create a solution. The current situation, is as "free market" as it gets. Lets see how long before someone comes up with a solution, or for your fairy tail "private courts" to be set up.
Yes, NGRBA was set up in 2009 to fix the problem. The "Free Market" had over 20 years to solve this pollution problem. Guess what? Externalities can't be solved by the free market. At very least, not before the 20+ years it takes to convince a government bureaucracy that there is a problem.
I'm not saying there aren't externalities to free markets, I think there are. I just don't think government is any better at dealing with them than markets. Friedman always says it better:
http://www.law.cornell.edu/uscode/text/33/652
http://en.wikipedia.org/wiki/Mississippi_National_River_and_...
Your solution is really called "internalizing the externality", and a near hundred-year-old analysis can be found in Coase's Theorem. http://en.wikipedia.org/wiki/Coase_theorem
Your solution requires "some entity" to create the concept of ownership, and then sell pieces of the shared resource to other people. You ensure that an owner exists for every part of the river, and then you get an economically optimal solution.
But WHO declares ownership? WHO enforces this ownership? If you believe in "private protection agencies" and "private courts", it is obvious that ownership of "The River" should be settled in the "private courts".
Eventually, you start building an entity functions exactly like the current US Government (except you use Libertarian friendly words to describe it). So please, describe to me a technique that isn't currently being used by the US Government to solve the problem of Externalities. Otherwise, you end up just describing our current Governing philosophy.
I guess if there's no convincing you, then your open-mindedness claim dies with this discussion.
Toodle-oo.
You're calling me close minded, when YOU are the one walking away from this conversation. As I said, you gave a valid solution, but this solution you're talking about requires a Government.
But if you don't feel like discussing it... sure, c ya later. I will say that this is the first time someone has called me "close minded" for calling their solution analogous to one of the most economically stable solutions known.
Now, I have NOT said that I subscribe to a full-on anarcho-capitalist system; I mainly understand the theory behind it, and think that it makes the best theory ON WHICH TO BASE A PRACTICAL SYSTEM OF GOVERNMENT. I do think government is needed for some things. I'm a huge fan of our original form of government in the US, namely federalism — though I'd have some cuts I'd make there too.
And I mainly felt like leaving this conversation because you seemingly try to insist that I don't know what I'm talking about. I do know what I'm talking about. Just because you don't agree with me, or you feel you've thought about this more than me doesn't make it so.
Did you even watch the video of Milton Friedman on market failures? He left it open at the end to say there are times where government might be best, but you cannot immediately and automatically say that government is better — which is exactly what the progressive movement in this country tends to claim.
This subthread started because someone disagreed with the following words: "Furthermore, it has been proven that ALL pure systems are imperfect."
I hold no qualms against Anarcho-capitalism, especially today as deregulation laws are beginning to show promise (New Jersey has some deregulation laws that seem to improve upon utilities like power and gas). It is when a purist comes up, and claims that it is the solution to all problems that I become a bit antsy.
Sometimes, Deregualtion is the key to solving problems. Other times, we need regulation. Pick and choose the philosophy for the situation, there is no silver bullet.
What about my distinction in your definition of government? You seemed so adamant about the fact that a private owner and our current government are the same, effectively. I thought I gave a reasonable response to that claim. You didn't continue that line of debate in your response, though.
http://en.wikipedia.org/wiki/East_India_Company
Companies can become Governments rather quickly. The difference between Companies and Governments is that there is none. The US Government is simply one of the largest companies created on this land.
The US Government has also claimed monopoly privileges on armies and police force. Within the lands that the US Government owns, no other groups of people can organize an army. Basically, Companies and Governments are all the same thing. They are a collection of people, attempting to work together for some abstract purpose.
Besides, the US Government has adopted anarcho-capitalism before. Calvin Coolidge's quote: "Perhaps one of the most important accomplishments of my administration has been minding my own business."
I'd say, Calvin Coolidge probably did more for the Anarcho-capitalist cause than any thought experiment revolving around an Anarcho-capitalist utopia. A heavy pusher of deregulation and a "Hands Off" approach to governing.
Certainly, Calvin Coolidge was less oppresive to the American population than the East India Trading Company was to the Indians.
I have yet to understand where you're going with this. If companies inevitably become so powerful that they become governments, then letting the sitting government regulate them is inconsequential; takeover is inevitable! Let's just all eat worms and die!
No. I think the original thinking during the age of reason makes more sense to me. I think that the people truly hold the power, and as long as we don't give up our inalienable rights to governments (in whatever form they exist), and be sure to always question and hold suspect the people we put into the collective positions of power, then we'll be ok.
Don't forget that the limited liability that we give corporations is a government-granted right. That's one of the major reasons we have issues with large companies.
(I'm not going to get into a debate about Coolidge. I think he was a great President, truly the last of his kind — though even he had his moments of growing government.)
No matter what bugs, attacks, malware or whatever happens, the US Government will pay you back your deposited money, to the fullest extent that it can.
If you don't see why this is useful, maybe you need a sanity check.
But I agree 100% that the idea that a cash account at a random bitcoin exchange is somehow as reliable as an FDIC insured bank is a completely batshit crazy notion.
Literally hundreds of banks have failed in the last several years.
That's the key.