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2 minutes ago, LenP said:

I think Ethereum might get there as they are rolling out new consensus algorithms to increase transaction volume and speed, but there is also a lot of interest in it's ability to execute smart contracts and host DAPPS. Might be too much to ask for a single public blockchain to be an app platform, decentralized / disintermediated legal framework, and also a convenient way to buy a cup of coffee. 

I use the Starbucks app. You could say the Starbucks app is also a digital coin. I buy credits at a $1.00 for $1.00 exchange rate, and then use them to buy coffee.

Sometimes, they give me a better exchange rate.

Starbuck's coins are not really marketable, but I wouldn't be surprised if they launched a Digital Coin that could be used by anyone who would agree to accept it.

They already have the payment app....

 

Once it's a starbucks coin, is it Fiat money?  

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I try to stay apolitical, but this one cracked me up:

<rant on> SEC actually regulate something?  Heard of Patrick Byrne and the story on overstock.com?  By keeping the DTCC opaque, and allowing market-makers to naked-short, they practically encour

Are bitcoins kind of like marina  shower tokens? In British Columbia?    

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1 minute ago, Raz'r said:

I use the Starbucks app. You could say the Starbucks app is also a digital coin. I buy credits at a $1.00 for $1.00 exchange rate, and then use them to buy coffee.

Sometimes, they give me a better exchange rate.

Starbuck's coins are not really marketable, but I wouldn't be surprised if they launched a Digital Coin that could be used by anyone who would agree to accept it.

They already have the payment app....

 

Once it's a starbucks coin, is it Fiat money?  

That is the rabbit hole we are headed down. I travel a lot, and so pile up a ton of reward points on that. I can trade those for dollars, and can also buy them. I could, if anyone would accept them, create an app that let's people conduct commerce with them. At what point does it stop being an incentive program and become a currency. The regulators will readily tell you that they do not have an answer, but someone is going to have to come up with one, because this ball will not stop rolling. 

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33 minutes ago, LenP said:

That is the rabbit hole we are headed down. I travel a lot, and so pile up a ton of reward points on that. I can trade those for dollars, and can also buy them. I could, if anyone would accept them, create an app that let's people conduct commerce with them. At what point does it stop being an incentive program and become a currency. The regulators will readily tell you that they do not have an answer, but someone is going to have to come up with one, because this ball will not stop rolling. 

simply, it becomes a currency when the gov't accepts it for taxes.  They have a massive incentive to not do that.

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<rant on>  OMG, whatever the future of money (and banking) is, it can't be worse than the present.

So today I go to do a transaction my company has done several times before, a US-dollar-denominated payment to a US-based corporate recipient from our US-dollar-denominated business account at our Canadian (RBC) bank.  The money went AWOL on a previous transaction, so my CFO had "saved a template" of all the wire-transfer details at our local branch, so she said it would be easy this time, just change the amount and date.

Can they find the mysterious "template"?  Does the teller even have a clue what she is doing?  Another teller overhears, leans in to help.  The manager guy starts to notice the smoke spewing out my ears, and comes over to try and help.

 

This whole SWIFT thing is fucked.  Beneficial accounts held at institutions that themselves are just accounts that are held at another institution until eventually it chases back to the real evil overlords like say a JP MorganChase... 

I have now had "professional bankers" screw up multiple >$10K transactions using this system, the first time when I bought my boat from Wareham, MA and towed it back.  In that case the recipients bankers didn't know what they were doing, and quoted incorrect account numbers to my bankers.

Give me a single string, let's call it a "public key" instead of all these "beneficial accounts".  It would make things so much easier.  What good is a banking system that typical bankers can't even use and understand?

<rant off>

Yes, I am aware that SWIFT handles lots of transactions perfectly well.  But it's stupidly complex with *way* too many middlemen.

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2 hours ago, bacq2bacq said:

<rant on>  OMG, whatever the future of money (and banking) is, it can't be worse than the present.

So today I go to do a transaction my company has done several times before, a US-dollar-denominated payment to a US-based corporate recipient from our US-dollar-denominated business account at our Canadian (RBC) bank.  The money went AWOL on a previous transaction, so my CFO had "saved a template" of all the wire-transfer details at our local branch, so she said it would be easy this time, just change the amount and date.

Can they find the mysterious "template"?  Does the teller even have a clue what she is doing?  Another teller overhears, leans in to help.  The manager guy starts to notice the smoke spewing out my ears, and comes over to try and help.

 

This whole SWIFT thing is fucked.  Beneficial accounts held at institutions that themselves are just accounts that are held at another institution until eventually it chases back to the real evil overlords like say a JP MorganChase... 

I have now had "professional bankers" screw up multiple >$10K transactions using this system, the first time when I bought my boat from Wareham, MA and towed it back.  In that case the recipients bankers didn't know what they were doing, and quoted incorrect account numbers to my bankers.

Give me a single string, let's call it a "public key" instead of all these "beneficial accounts".  It would make things so much easier.  What good is a banking system that typical bankers can't even use and understand?

<rant off>

Yes, I am aware that SWIFT handles lots of transactions perfectly well.  But it's stupidly complex with *way* too many middlemen.

get a better bank. Problem SOLved.

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36 minutes ago, Mismoyled Jiblet. said:

I remember both being talked about at the same time. These companys had massive potential value because they'd dominate the market, while at the same time people were preaching about decentralization. It's clear in retrospect that these were competing visions. I see a repetition of this same pattern - there are all kinds of crypto companys that supposedly will have value by dominating the market and charging money, but these guys are somehow better because they don't charge money and everythings decentralized? Huh?

To my cynical gaze I see lots of first world tech bros talking about crypto, dominating the discussion, and most seemingly oblivious to what consumers not them might want. i.e. I've seen any number of women use ApplePay but I've rarely seen a dude. Aside from you, now, LenP, which is why you are far better than the average I've never seen one discuss this kind of stuff.

ApplePay is the bomb. Hell, my local chandlery takes it.

We're still a decade behind Europe in payment tech. Even with ApplePay.

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There's a lot of concepts working together.

First, the key behind bitcoin is that it's (a) open and (b) democratic.  Both of those aspects make it decent for governments to accept as payment but virtually impossible for governments to use as payments outward.  Every transaction is tracked.  Once you find out the wallet of some major entity, you know ALL the payments they're making out and receiving back.  Again, that the IRS has a wallet and you can send them money is fine - and that they then go to 'coinbase' or wherever and turn it back into cash isn't terribly complicated.

But imagine that the government was payout OUT payments through that account.  Or the DOD was sending money to contractors?  Pretty soon, it would become obvious what wallets belonged to what government agencies and what wallets they were giving money too.  Again, that's not a big deal but in the world of big data, eventually the nodes of activity would become tracked and monitored by activists.

As I've said before, bitcoin as money is literally the least interesting aspect of the technology. 

I can see bitcoins and the like existing along side a general financial system but I can't see any way it replaces money.  Too Many Secrets - Sneakers :)

 

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12 hours ago, Raz'r said:

simply, it becomes a currency when the gov't accepts it for taxes.  They have a massive incentive to not do that.

Not quite massive enough in some places, as Eva Dent.

On 4/30/2019 at 4:02 AM, Importunate Tom said:
On 4/29/2019 at 3:51 PM, bacq2bacq said:

I'll really truly buy into the *coin thingy (not all of which have inherent supply limits like bitcoin) when a national government accepts them for payment of taxes. Hmnnn as I was looking to see if it had already happened (think not, just some states and municipalities so far, I think) I found a municipality not far away from me accepting bitcoin:
https://metro.co.uk/2019/03/30/canada-can-pay-taxes-bitcoin-9060356/
https://www.coindesk.com/ohio-becomes-first-us-state-to-allow-taxes-to-be-paid-in-bitcoin


That's interesting.

 

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20 hours ago, Raz'r said:

simply, it becomes a currency when the gov't accepts it for taxes.  They have a massive incentive to not do that.

I am not sure it is so simple. They also have an interest in enforcing KYC/AML for transferring money regardless of whether they accept it for paying taxes. 

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18 hours ago, Mismoyled Jiblet. said:

I remember both being talked about at the same time. These companys had massive potential value because they'd dominate the market, while at the same time people were preaching about decentralization. It's clear in retrospect that these were competing visions. I see a repetition of this same pattern - there are all kinds of crypto companys that supposedly will have value by dominating the market and charging money, but these guys are somehow better because they don't charge money and everythings decentralized? Huh?

To my cynical gaze I see lots of first world tech bros talking about crypto, dominating the discussion, and most seemingly oblivious to what consumers not them might want. i.e. I've seen any number of women use ApplePay but I've rarely seen a dude. Aside from you, now, LenP, which is why you are far better than the average I've never seen one discuss this kind of stuff.

Crypto economics are a bit different, which is also why the SEC is having a hard time getting consistent guidance out or knowing how to handle the companies. When an entity issues a token, or completes an ICO, the intention is that the token is used to conduct some type of commerce transaction within an ecosystem created by that entity. The entity retains some number of tokens, so if the ecosystem thrives and people use the tokens, then the tokens retain or gain value, and the issuing entity profits from that. The problems arise because very often when a token is used it looks like a security, even if months later it very much looks like a commodity or a currency. So in that regard, you could have both the issuing entity becoming very wealthy while at the same time having no control over their decentralized creation. Satoshi Nakamoto held or holds 10 billion in Bitcoin, but does not control Bitcoin in the way that Google controls it's search engine. At most, Satoshi is a participant in an ecosystem. 

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<rant on> SEC actually regulate something?  Heard of Patrick Byrne and the story on overstock.com?  By keeping the DTCC opaque, and allowing market-makers to naked-short, they practically encourage counterfeiting of the stuff they're supposed to be regulating.<rant off>

I think the most important thing we are learning about the future of money in this modern era is that its creation and management cannot be left to "the experts".  Much better to let it all evolve and select something that works best.  It'll happen whether we like it or not.  Bad currencies do not survive long term, markets reject them.

I don't want to be pedantic (but succeed?), but we should distinguish between "money" and "currency".  I wrote the article at the following link a long time ago now, before I had much awareness of the latest crypto-craze (the first was in the 90s - Digicash, CyberBucks...) and how blockchains and anonymized crypto-verifiable DAG technology might change things.  The magazine addresses a general audience, had a strict length-limit, and editors required some specific actionable guidance at the end that looks a bit silly to me now, as I was mainly focused on getting some key basic ideas across to a broad audience that might be interested, and who all certainly had skin in the game.  I'm not a trader.

But the core ideas: that money serves a real function in our minds and economies; that currency serves that function in the real world; that there are a lot of ways that we can make currency; economies are complex systems; and that we happen to be using one particular way of creating currency now does not mean that we cannot change; well, they are all still true today.

Hang on while I don some teflon, kevlar, fire-retardant.  Awright, here's a link to a magazine article I wrote about money and currency in October 2012.

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12 minutes ago, Mismoyled Jiblet. said:

I've never seen a company complain about shorts, much less naked shorts, that didn't need to be shorted. Indeed the general nature of shorting - many shorts are smaller, independent, contrarian, non "experts" -  creates quite the contrast of your objections in this paragraph and your next paragraph and your arguments against "experts".

I guess my fundamental argument is against the thought that people want disintermediation & decentralization. I don't believe most do. Linux never dominated computing, in fact computation has become more remote to people. What they want is lower transaction costs or things to be "easier". They might even pay a premium for easier like consumers do for many goods at amazon. Amazon & eBay are actually reintermediating the web - their reach is such existing retailers are selling product for higher prices through them than via their own websites.

I would characterize Amazon's marketplace is more of a facilitator in a DTC supply chain. Other examples are Uber, Lyft, and AirBnB. DTC and subscription based business models are growing. I am not sure what Linux has to do with anything, but it does run most of the Internet and runs most of the smartphones which in turn comprise most of the Internet traffic. It is kind of a big deal. 

If I understand you correctly, I agree on short selling. It was the introduction of Bitcoin futures which helped pop the bubble and enable more efficient price discovery. I would consider that a good thing. Bubble would have popped eventually, but allowing non-owners a mechanism to bet against helps make the market more efficient. 

 

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Modern Monetary Theory Is Supply Side Economics—but for the Left
 

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...

The underlying question—do deficits matter?—will be a part of liberal policy conversations heading into 2020, as Democratic contenders decide whether to back proposals that would radically increase outlays. Leading candidates, including Sen. Elizabeth Warren (D–Mass.) and Sen. Kamala Harris (D–Calif.), have already challenged the idea that new government spending must be offset.

That notable lawmakers like Ocasio-Cortez and Warren are flirting with this notion is, perhaps, a sign of a flaw in MMT thinking: It relies on Congress to raise taxes and cut spending in order to combat inflationary spirals, should they occur—yet congressional adherents are mostly drawn to the allure of being able to spend more without commensurate spending cuts or tax hikes.

It's an economic theory deployed selectively for political convenience—and also, perhaps, out of envy. For roughly 40 years, Republicans have embraced an overly simplified version of "supply-side economics," which posits that tax cuts spur economic growth, which in turn generates additional tax revenue. That means tax cuts can "pay for themselves" by leading to more total money paid in taxes, thanks to the growing economy, than what was lost from the rate cuts. In theory that can happen, but only rarely, when tax rates are very high to begin with. Yet many Republicans legislate as if tax cuts always pay for themselves, thus sparing them the political consequences of offsetting lost revenue by trimming spending.

Like the simplified version of MMT, it's a way of enacting popular policy preferences while pretending there's no downside. Not only can legislators give the people what they want—they can promise it will be free, and let some future sap deal with the bill when it comes due.

 

 

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Bitcoin Is Anonymous and Fungible

Except it's not.
 

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...

The bitcoin network attains consensus through what is called a proof of work function. Each transaction is time-stamped and linked together in the public ledger called the blockchain. The blockchain allows everyone to agree on who owns what coins, and where they should go.

This was a brilliant hack. It overcame two longstanding problems in computer science called the Byzantine General's problem and the double spending problem. And it has worked incredibly well, spawning a host of digital currency projects inspired by these breakthroughs.

But this breakthrough came with a trade-off. The blockchain ledger that allows for distributed consensus is radically transparent. Transactions made on the bitcoin blockchain are recorded and visible to everyone for all time. There are no do-overs. And it's possible to trace where and how bitcoin users acquire and spend their funds.

...

This might not seem like a huge deal. Most people mostly abide by the law, so they don't worry about their public transaction history. In fact, some people think blockchain surveillance is a socially good thing, since it helps authorities nab their targets. (They might sing a different tune if they were on the outs under a repressive state.)

But bitcoin's radical transparency could be a problem for even the goodiest of two-shoes.

The problem is that bitcoins can be tainted by a previous owner's activities. Let's say someone uses bitcoins to commit a crime—let's say it's something victimless, like gambling. The deed is done, and they shuttle their filthy lucre through an offline transaction to hide their tracks.

Eventually, those coins end up in the hands of a completely unrelated party. He receives them legitimately, and wants to send them to a third-party operated exchange. Imagine his shock when the exchange refuses his funds, telling him they have been blacklisted. The authorities have traced the blockchain and determined he has hot loot. He might even have to turn over his bitcoins.

This is an illustration of bitcoin's possible fungibility problems. A fungible currency can be exchanged one to one with no differentiating aspects. An ounce of gold is an ounce of gold, no matter where it came from. Because bitcoins can be traced, and possibly blacklisted, people worry that it may not be truly fungible. Tainted coins may be worth less than "clean" ones, because they are less saleable, which means that 1 BTC does not always equal 1 BTC.

 

The idea that tainted money can be seized is the kind of thing drug warriors would love.

Do people still roll up bills to snort coke? I remember hearing that lots of our money has the stuff on it.

What's in your wallet?

 

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If We Told You Neal Stephenson Invented Bitcoin, Would You Be Surprised?
 

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I am not saying that Neal Stephenson is Satoshi Nakamoto. What I am saying is: Would it really be surprising if he were?

That this outlandish possibility even exists suggests the ingenuity of his mind and the depth of his influence. It's plausible that Neal Stephenson invented, or helped invent, Bitcoin, because that is simply the sort of thing that Neal Stephenson might do.

 

Seems more than a bit possible to me.

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Facebook's Libra Is Submissive Where Bitcoin Is Subversive
 

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...

The difference is that bitcoin is a decentralized technology that nobody controls, which creates enormous engineering challenges in security and scalability that are being solved using complex cryptography. This is a decades-long project. Libra's engineering hurdles are comparatively simple because its a centralized payment system run by a bunch of big companies. The white paper uses bitcoin buzzwords like "blockchain," which should be understood as marketing hype. Libra is fundamentally a top-down system that runs using a database, which will never change.

Why is bitcoin's decentralization worth all that extra time and effort? Because governments can't stop it. So sex workers and porn stars use it when they're denied bank accounts, drug users use it to buy banned substances through an online bazaar, it enables Venezuelans to circumvent capital controls for buying food and medicine from abroad, and Brazilians can use it to get around import taxes that run as high as 60 percent.

Libra, on the other hand, will be controlled by a handful of big companies that will have no choice but to comply with government dictates, and the white paper makes it clear that the nonprofit running the project will collaborate with regulators.

Bitcoin is also resistant to government inflation, with a supply that's capped at 21 million units. Libra will function like a central bank, with its value propped up by a basket of "bank deposits and short-term government securities" held in reserve. In Venezuela, where the government-issued bolivar is losing value at a rate of about 1 million percent per year, users could hypothetically store their money in the Libra. And in the short-term, the Libra will likely be less volatile than bitcoin, which is currently valued at less than half of its December 2017 high. (Though it has also risen 154 percent in dollar terms so far in 2019.)

The problem is that in Venezuela (like in China, Iran, and India), Bitcoin is used despite government opposition. Why would the Maduro regime tolerate a competing currency run by a bunch of U.S. companies? Keeping the Libra out of Venezuela will be much easier than quashing bitcoin, which is designed for the purpose of resisting government censorship.

...

 

Which is fine for some of us. Not very different from the credit card I use all the time. And equally useless to those mentioned in the second paragraph above for that reason.

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I had a rant above:

On 5/1/2019 at 4:01 PM, Mismoyled Jiblet. said:

I've never seen a company complain about shorts, much less naked shorts, that didn't need to be shorted. Indeed the general nature of shorting - many shorts are smaller, independent, contrarian, non "experts" -  creates quite the contrast of your objections in this paragraph and your next paragraph and your arguments against "experts"

If you are going to respond, MJ, might as well respond to what is written, no?  First, I did not complain about legit shorting, I made quite explicitly the point that the DTCC and SEC are complicit in the fraudulent and illegal activity of counterfeiting corporate stock, ie "naked" shorting.  Do you know about the grandfathered market-maker clause and so on?  It is abused, and the abuse allows counterfeit supply to float in the market.  It is anything but healthy for markets for fraud to be present, even prevalent. You'd have to teach me how fraud improves marketplaces if that is what you believe.  Covered shorts are kinda like me renting your car, you saying "ok", I pick it up, drive it across town and promptly sell it.  The problem is that one day, you might want it back.  It isn't fraud, as long as the original two parties have a deal worked out about what to do in that case.  This is quite different than naked shorting.  Don't conflate.

I don't think you understood my point (actually, others', whose work I have read, and agreed with) about "experts".  Studies show, the science is settled, and experts agree, experts are often wrong.  Definite lack of skin in the game and proper incentives.   We could follow up on that, but this is a thread about money and currency, and it is incidental that it is a bunch of "experts" that are right now blowing up the global economy.  If you are staring at a lit stick of dynamite, should y'all stand around it, arguing about who lit the fuse? ... But:  MJ, I do agree "convenience is king" (a phrase I came up with in the '90s to counter "content is king").  Moving on...

I came to this thread today to capture a quotation from the current sitting US prez Trump:

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This Wednesday, President Trump accused both China and Europe of “playing [a] big currency manipulation game and pumping money into their system in order to compete with USA.” The president suggested that the U.S. should “match” their games and insinuated that America has allowed other countries to take advantage of it for years.

[from https://www.armstrongeconomics.com/market-talk/market-talk-july-3-2019/]

The race to the bottom is on!  That sure sounds like a starting gun to me... last to print-like-fuck is a dirty rotten egg.

Jim Rickards is a bit of a clown, but: https://www.goodreads.com/book/show/11515298-currency-wars?ac=1&from_search=true

Cheers all,
b

 

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On 6/19/2019 at 8:02 AM, Importunate Tom said:

And equally useless to those mentioned in the second paragraph above for that reason.

I'm not following you, ImpTom.  Pretty sure all a Venezuelan or Brazilian needs is a smartphone and a sidewalk outside an internet cafe to transact with bitcoin.  How: "equal"? 

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18 hours ago, bacq2bacq said:

I'm not following you, ImpTom.  Pretty sure all a Venezuelan or Brazilian needs is a smartphone and a sidewalk outside an internet cafe to transact with bitcoin.  How: "equal"? 

My comment was intended to mean FB's "Libra" won't be useful to Venezuelans because "Libra, on the other hand, will be controlled by a handful of big companies that will have no choice but to comply with government dictates, and the white paper makes it clear that the nonprofit running the project will collaborate with regulators."

The reason they're using Bitcoin is to get around their regulators.

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@Importunate TomThanks for the clarity.  I agree. 

There is actually a *whole lot* of both simple misunderstanding, and "genuine disinformation" when it comes to money and currency.  I would guess that far fewer than 50% of holders of bachelors' or masters' degrees in economics have much of a clue about money, currency, international capital flows, etc.  We have been in the fishbowl now for so long, most can't imagine it any other way.  For PhDs, it can't be more than 1-2% that have any real understanding left after their indoctrination. [yes, I speculate wildly here... nonetheless...]

Similar to "the climate debate", an "academic consensus position" was adopted long ago, and I think the turning point might have been around the time of the Hayek/Sraffa debate, after which there was very little public funding for research supporting anything but "the consensus view", and lots of ridiculing of opposing views, much like in climate today, where either one "believes" or is "a denier", and there is no room left for intellectual debate.  Keynes recanted on some of the most important aspects of his theories on money late in life, but by then the die was cast, the direction was set, and the mechanisms were in place to impose Keynes' model on everyone, everywhere. 

And we are still there, despite that the inventor of the model (Keynes) long ago realized it was fucked.  The bankers (who have had fingers on puppet-strings since forever, but, in modern times, starting with Mayer Amschel Rothschild in Frankfurt in the late 1700s) had found a guy that sang their song, so they wound him up, put him on stage, and he sang.  It was only much later in life that Keynes realized he had been had. 

I realize I am posting about the history of money on a thread dedicated to its future.  I don't think it is irrelevant.

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“We have only one real currency in the USA, and it is stronger than ever, both dependable and reliable. It is by far the most dominant currency anywhere in the World, and it will always stay that way. It is called the United States Dollar,

https://www.theverge.com/2019/7/11/20691188/president-donald-trump-bitcoin-cryptocurrency-facebook-libra

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On 7/5/2019 at 10:22 AM, bacq2bacq said:

And we are still there, despite that the inventor of the model (Keynes) long ago realized it was fucked.  The bankers (who have had fingers on puppet-strings since forever, but, in modern times, starting with Mayer Amschel Rothschild in Frankfurt in the late 1700s) had found a guy that sang their song, so they wound him up, put him on stage, and he sang.  It was only much later in life that Keynes realized he had been had. 

I look at these tools - monetary policy -  like pain killers - they're incredibly valuable for what they can do but they're also easily abused.

 

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With some forms of pain-killers, a tolerance builds up, after which the drug is no longer effective, yet the body has now become physically addicted to "the cure".

Such is the case with Keynesian economics (fiat+fractional+central banking+gummint debt to -haha- regulate the business cycle).  It might have worked a little bit at first, then rapidly became the albatross.  I long ago saw a study that fairly effectively proved that whatever little influence CB policy had, it was only on the short end of the curve, and was in fact just a response to what the market was already doing on the long end.  In this case, the tail wags the dog.  Watch the yield curve dance, and tell me: which end is taking the lead?  Here is your link, folks:    https://stockcharts.com/freecharts/yieldcurve.php  Although, with central banks everywhere not just setting overnight rates, but buying up everything in sight to try and delay the implosion, central bankers have expanded their influence beyond just the short end of the yield curve.  This is very, very bad.  Debt markets are totally broken.

The current financial model is in its death-throes.  But it has the momentum of the entire world behind it now, as *everyone* drank the koolaid this time.  Interesting times.  Japan is probably the canary in this coal-mine: 

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Bank of Japan (BOJ) Governor Haruhiko Kuroda publicly stated that it may maintain ultra-low rates for a further period of well over a year. However, he also warned against the idea of propping up the economy through unlimited money printing to finance government spending. That may sound nice, but the Bank of Japan is trapped. Its holdings of the national debt have reached nearly 50%. The BOJ modified its forward guidance or pledge on how it will guide future monetary policy. It stated that current very low interest rates will continue at least until the spring of 2020. However, there is ZERO hope without the BOJ buying the government debt that interest rates will rise dramatically and a financial crisis will be in the making.

The BOJ will keep rates low for an extended period of time for they have no choice. There is no way out of this nightmare and the real inflationary cycle comes when the majority wake up and realize that the emperor has no clothes, and that means the central bankers worldwide

https://www.armstrongeconomics.com/international-news/japan/boj-trapped-how-will-the-nightmare-end/

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Totally agree.  We've got a confluence of the growth model ending and with what science fiction writers typically call a 'post scarcity world' where 'things' become essentially valueless because they can be made so cheaply.   The few things that can't be mass produced become essentially infinitely valuable, controlled by a small cadre of uberpowerful types.  That's a really long conversation.

One of the reasons I've been looking at Andrew Wang lately isn't because I particularly 'like' the concept of universal basic income, it's because I'm not sure there's another realistic option at the end.  It's the least bad option that I've heard.

 

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35 minutes ago, cmilliken said:

Totally agree.  We've got a confluence of the growth model ending and with what science fiction writers typically call a 'post scarcity world' where 'things' become essentially valueless because they can be made so cheaply.   The few things that can't be mass produced become essentially infinitely valuable, controlled by a small cadre of uberpowerful types.  That's a really long conversation.

One of the reasons I've been looking at Andrew Wang lately isn't because I particularly 'like' the concept of universal basic income, it's because I'm not sure there's another realistic option at the end.  It's the least bad option that I've heard.

 

One of the inherent problems of capitalism is the merging of "profit" with increasing wealth. You can make more money with a gun and smile, than with just a smile. In the interest of long-term economic health of a national economic system, every gov't -should- have a vested interest in stability, in the increase of net/aggregate wealth, over shell-games 'n fraud 'n theft. However governments are made up of individuals, and individuals have the characteristic of greed which motivates them to use what influence they have over the gov't functions to stuff mo'money into their own pockets.

When this trend becomes common enough, the country tends to fall apart.

The question is, what happens when a lot of countries are suffering the same trend all at once?

I also like the concept of a basic universal income.... could easily be managed via a SNAP like credit card program..... but this is an approach to the problem of wealth mal-distribution, not debt nor gov't dysfunction

- DSK

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@cmilliken First, Honorable Knight, horror of horrors but First Mate and I have just reached the end of Book 2 of Cervantes' masterpiece!  How will I fall asleep without Sancho and Sorrowful's blithering and blathering?  A re-listen is in order.  All praise audible.com.  We picked Grossman's recent translation.  But, here, you wrote:

On 7/12/2019 at 9:12 AM, cmilliken said:

...a 'post scarcity world' where 'things' become essentially valueless because they can be made so cheaply.   The few things that can't be mass produced become essentially infinitely valuable, controlled by a small cadre of uberpowerful types.  That's a really long conversation.

I think the right guy to read to best understand value and price is Menger (took me a while to recall who I had read on this, and been impressed...  I couldn't get "Mencken" out of my mind... ;-).   If one hasn't heard of Menger, a brief intro can be found at: https://www.econlib.org/library/Enc/bios/Menger.html.  He takes something of a behavioural economic approach, I suppose... value, and therefore prices, are weird, because people are involved.  I find it hard to get to your/the sci-fi "post-scarcity" world.  How?  Vast population decrease (crashing demand) while all the automated production infrastructure stays operational?  Much more fi than sci in such a scenario, I think.  I also think Malthus taught us that in any sufficiently complex economy, there will always be those operating at the marginal limits.

I think you made a typo?  Andrew Yang-not-Wang perhaps?  UBI being a "least-bad" option right now, I tend to agree.  But there are still problems with this non-organic approach.  What is the process by which the optimal UBI-level should be decided?  We must all understand that there is a difference between a "right" and a "good".  We can not have a "right" to a UBI, as that is a "good", a quantity of currency.  Rights cannot have physical attributes, they are conceptual only, and asserting a "right" cannot create a "good".  The UN declaration of human rights articles 25.1 and 26.1 fall afoul of physics here.  A nice aspirational document, perhaps, but self-contradictory and toothless.  We cannot guarantee or "enforce" anything about what bounty Nature might share with us.  We can only guarantee things about human behaviours, for instance that we will all promise to cooperate to beat up bullies (with due process, of course) who beat up on others weaker than themselves.  We can all agree to cooperate to guarantee that for each other.

But we cannot ever guarantee that there will be a bountiful harvest with enough for all.  So the UBI fails a basic sanity-check.  I think it quite likely that blowing up all the special programs and simplifying socialist income and wealth re-distributions would result in a more efficient system with better results.  But it still doesn't solve the currency/debt crisis that we now are watching draw to a close.  So many problems, so little time... but I don't think this particular windmill, of post-scarcity, is one we need worry about.

 

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1 hour ago, bacq2bacq said:

@cmilliken First, Honorable Knight, horror of horrors but First Mate and I have just reached the end of Book 2 of Cervantes' masterpiece!  How will I fall asleep without Sancho and Sorrowful's blithering and blathering?  A re-listen is in order.  All praise audible.com.  We picked Grossman's recent translation.  But, here, you wrote:

I think the right guy to read to best understand value and price is Menger (took me a while to recall who I had read on this, and been impressed...  I couldn't get "Mencken" out of my mind... ;-).   If one hasn't heard of Menger, a brief intro can be found at: https://www.econlib.org/library/Enc/bios/Menger.html.  He takes something of a behavioural economic approach, I suppose... value, and therefore prices, are weird, because people are involved.  I find it hard to get to your/the sci-fi "post-scarcity" world.  How?  Vast population decrease (crashing demand) while all the automated production infrastructure stays operational?  Much more fi than sci in such a scenario, I think.  I also think Malthus taught us that in any sufficiently complex economy, there will always be those operating at the marginal limits.

I think you made a typo?  Andrew Yang-not-Wang perhaps?  UBI being a "least-bad" option right now, I tend to agree.  But there are still problems with this non-organic approach.  What is the process by which the optimal UBI-level should be decided?  We must all understand that there is a difference between a "right" and a "good".  We can not have a "right" to a UBI, as that is a "good", a quantity of currency.  Rights cannot have physical attributes, they are conceptual only, and asserting a "right" cannot create a "good".  The UN declaration of human rights articles 25.1 and 26.1 fall afoul of physics here.  A nice aspirational document, perhaps, but self-contradictory and toothless.  We cannot guarantee or "enforce" anything about what bounty Nature might share with us.  We can only guarantee things about human behaviours, for instance that we will all promise to cooperate to beat up bullies (with due process, of course) who beat up on others weaker than themselves.  We can all agree to cooperate to guarantee that for each other.

But we cannot ever guarantee that there will be a bountiful harvest with enough for all.  So the UBI fails a basic sanity-check.  I think it quite likely that blowing up all the special programs and simplifying socialist income and wealth re-distributions would result in a more efficient system with better results.  But it still doesn't solve the currency/debt crisis that we now are watching draw to a close.  So many problems, so little time... but I don't think this particular windmill, of post-scarcity, is one we need worry about.

 

Thanks for the references!  I'll take a look at Menger.

And you're right of course - Yang.  I appreciate the thoughtful reply!
 

 

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Here is a very Orwellian vision of the "Future of Money", now happening in a country potentially near you:

https://www.npr.org/2018/0/Dogballs/658808705/thousands-of-swedes-are-inserting-microchips-under-their-skin

I wrote predictions long ago of this happening.

We should all be very, very wary of such technology.  Without cash and an underground economy (like say, that of the American Colonies in the late 1700s...) society loses a very important stabilizing function, the ability to withhold support from and to actively oppose an oppressive "authority".  

Nothing can be accomplished by a right to bear arms if all you have is.... bare arms and and a right-wrist implant. 

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Blessed Bipartisan Unity On Cryptocurrencies
 

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"I am not a fan of Bitcoin and other Cryptocurrencies, which are not money, and whose value is highly volatile and based on thin air. Unregulated Crypto Assets can facilitate unlawful behavior, including drug trade and other illegal activity," the tweeter-in-chief complained in a jab that applies just as much to paper money and coins.

Just as politicians seem to unite in fear of people buying and selling things without permission, the rest of us should be brought together in recognizing that what scares governments about cryptocurrencies—and cash—is exactly what's good about the stuff.

And politicians really are awfully united in their disdain for anonymous and unapproved trade. "Facebook has announced a plan for a crypto currency platform which appears to meet the needs of drug dealers, human traffickers, tax evaders, and terrorists," Rep. Brad Sherman (D-Calif.) harrumphed recently in response to Facebook's announcement of the Libra payment system. Libra actually doesn't seem to lend itself to such uses, but Sherman covered himself by calling for all cryptocurrencies to be banned.

 

And bipartisan unity has the usual effect of making me long for gridlock.

And yes, of course the best and brightest mean cash too, for the same reasons.
 

Quote

 

"A large part of it is used to facilitate tax evasion and a huge spectrum of criminal activities," said Harvard University's Kenneth S. Rogoff, former chief economist of the International Monetary Fund, in a 2016 interview calling for ditching another anonymous means of exchange: cash.

"Paper currency," he said, helps contribute to "drugs, corruption, human trafficking, etc." And yes, he knows that dumping cash limits people's ability to engage in unmonitored exchanges. To him, that's a plus.

"The government's right to tax, regulate and enforce laws trumps individual privacy considerations," Rogoff said.

 

Trump's fears trump reason and are shared by notable TeamD'ers like Rep Sherman and Sen Manchin.

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Regulating Libra
 

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...

"We are fully committed to working with regulators, here and around the world," Marcus said on Tuesday before the Senate Committee on Banking, Housing and Urban Affairs. "And let me be clear and unambiguous: Facebook will not offer the Libra digital currency until we have fully addressed regulators' concerns and received appropriate approvals."

The hearings were a useful reminder that one of the many reasons that bitcoin is a revolutionary technology with profound political consequences, and Facebook's Libra is a payment network with some interesting properties, is that Congress can never make Satoshi Nakamoto appear on national television to be grilled by lawmakers.

 

Being submissive to regulators is a good thing. Unless, of course, you're a participant in Hugo Chavez' Economic Miracle. Then it just means starving.

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18 hours ago, Olsonist said:

Tom is deciding whether gold or bitcoin would be a better investment.


And Olsonist is endlessly clucking his gossip, as hens will do.

My real answer is neither. I like real estate.

But I'm interested in currencies and how they impact our lives.

How Bitcoin Is Freeing People in China, Venezuela, Iran, and…America
 

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...

Much of the discussion has understandably focused on how it is transforming economic exchange. But Alex Gladstein, the chief strategy officer of the Human Rights Foundation, a nonprofit that promotes and protects civil liberties in closed societies, is interested in how it empowers people in autocratic countries to escape government control. Only about 8 percent of global transactions use cash and the switch to digital payments means that authorities can track what individuals are up to with greater ease than they used to. 

Bitcoin, its underlying blockchain technology, and the emerging Lightning payment network are allowing people to escape surveillance, says Gladstein

 

 

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https://www.armstrongeconomics.com/world-news/taxes/australia-making-it-2-years-in-prison-for-paying-more-than-10000-in-cash/

It looks like possession of cash might become a convenient way for the unseen class to jail lots of little people in Australia, if Australians don't wake up and do something about it.  Or is it already too late?  I hope there are some Aussies here who see this and write their political representatives.  Or just paint a sign and strut the streets with it.  What madness!  In my country you might get punished if you REFUSE to accept legal tender...  IT IS LEGAL TENDER!!!!!

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In Australia, they want to make it a criminal act with a penalty of 2 years in prison for purchasing anything with more than $10,000 in cash. Australia is really going off the deep end. They are desperately trying to eliminate all cash and are forcing people to have only bank accounts so they can tax them as they like. This ensures that when there are bank failures, they can just confiscate the people’s money to save the bankers. Australia began as a penal colony, and they seem to retain that idea that the people are really criminals in their minds and are not entitled to their own assets. This also explains why non-Americans are starting to hoard US currency around the world.

We should just accept it. Everything is our fault because we elect these people who then see us as evil. This is not going to end very nicely. What happens when it comes crashing down? Do the police start shooting citizens as has been the case in Venezuela?

Whatever happened to liberty, freedom, and morality? I do not know. I was in the airport going through security and the guy in front probably had not flown in decades. He was appalled at having to take his shoes off, and then his belt. He had $15,000 in cash and they demanded to see his ticket for if it was overseas, they would have confiscated the whole thing. He was going on a domestic flight. He asked, what else? Should he just strip naked? They finally said just go. In Australia, it would be a small tiny step to arrest you for just having more than $10,000 in cash.

There were two girls between me and that gentleman. They were the probably early 20s. Their comments were telling. They said: This guy is stupid. You always have to take your shoes off. What’s he doing with all that money? So, here was one chap who hadn’t flown since 2001 and then two 20-somethings who had no idea that there was once upon a time when you did not have to go through all of this. They now see virtual strip searches as normal. Oh, how things change.

There must be myriad quotations about the death-by-a-thousand-cuts way in which freedom is lost, none of which am I looking up and providing to y'all.  But this is not just a little flesh-wound.  This is a giant sharp rapier thrust into the beating heart that powers the Australian economy. 

And yet we should forgive them, for they really truly seem to know not what they do. 

Onward they march, locked in military-precision goose-step in their Pragmatism Parade down Best Intention Boulevard. 

Hell?  "This way folks...  goose-step right on up...That's it.  C'mon, children first, you are much more easily brain-washed, and know what neither freedom nor servitude really looks like... step right up, this way...papers please, papers please..."

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16 hours ago, bacq2bacq said:

I hope there are some Aussies here who see this and write their political representatives.  Or just paint a sign and strut the streets with it.  What madness!  In my country you might get punished if you REFUSE to accept legal tender...  IT IS LEGAL TENDER!!!!!

Maybe they're still allowed to name a dink that is towed behind "LEGAL" so it's all good.

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  • 2 weeks later...
On 9/13/2019 at 5:44 PM, Mismoyled Jiblet. said:

for someone who's so big on manners and etiquette tomballs sure doesn't give a fuck about basic forum etiquette like not cross-posting. wonder why?

Fuck off and show us your wife or girlfriends' tits, but take it to Tom Ray Anarchy.

Getting back to the topic of this thread, a bipartisan group of congresscritters who are joined by Trump and his Treasury Secretary don't like Facebook's Libra idea. So that makes me like it a bit better.

But Facebook Says Its New Digital Currency Will Be 'Open to Anyone.' That's Not True.
 

Quote

 

For starters, Libra will be a "permissioned system," meaning that only a few hand-picked parties—through an independent governing body called the Libra Association—will be allowed to run the network. This is different than permissionless systems like bitcoin, where anyone can connect to validate transactions. That closed nature would leave Libra's users vulnerable to outside influence, because permissioned validators can coordinate to block transactions for regulatory or political reasons.

...

And then there are the regulators, who are already licking their chops. Rep. Maxine Waters (D–Calif.), the chair of the House Financial Services Committee, demanded Facebook cease work on Libra until congressional concerns are appeased. Europe and India are also wary. Assuming they let Libra exist at all, will governments allow the currency to transition to being truly open to everyone? Or will they insist that the Libra Association always exercise the discretion it is giving itself at the start?

Such targeting is possible because Facebook anointed the Libra Association as privileged validators instead of just releasing permissionless code to the world. Subpoenaing organizational leaders to a few congressional circuses could spook reluctant partners into folding or collaborating with governments. Permissionless networks provide no such targets. It would be virtually impossible to compromise each bitcoin node, for instance.

 

When Maxine Waters and Donald Trump are on the same page, it's time to turn it.

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On 6/19/2019 at 8:02 AM, Hypercapnic Tom said:

Facebook's Libra Is Submissive Where Bitcoin Is Subversive
 

Which is fine for some of us. Not very different from the credit card I use all the time. And equally useless to those mentioned in the second paragraph above for that reason.

The future of Libra looks kinda bleak at the moment.
 

Quote

 

Last week, Democratic Sens. Brian Schatz (Hawaii) and Sherrod Brown (Ohio) sent letters to leadership at Visa, Mastercard, and Stripe, encouraging them to pull out of Libra, a planned cryptocurrency project spearheaded by Facebook.

Among other concerns, the senators griped that Facebook "has not provided a clear plan for how it will prevent Libra from facilitating criminal and terrorist financing, destabilizing the global financial system, interfering with monetary policy, or exposing consumers to risks currently limited to accredited investors." They then raised the issue of child sex abuse photos and videos, claiming such things would be facilitated by combining encrypted messaging with encrypted payments.

"If you take this on," the senators warned, "you can expect a high level of scrutiny from regulators not only on Libra-related payment activities, but on all payment activities."

The letter of concern—or threat—from government bullies seems to have had its intended effect. Within days, all three companies (plus other prominent would-be partners) ran away scared and abandoned the project.

...

Facebook chieftain Mark Zuckerberg is scheduled to testify next week before the House Financial Services Committee, and the government's fears about Libra will no doubt be further piled on him.

 

Anyone want to guess why the CEO of Bitcoin won't be hauled in front of Congress?

Possibly because there isn't one?

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1 hour ago, Hypercapnic Tom said:

The future of Libra looks kinda bleak at the moment.
 

Well, they've laid out the issue at least:

"  prevent Libra from facilitating criminal and terrorist financing, destabilizing the global financial system, interfering with monetary policy, or exposing consumers to risks currently limited to accredited investors."

Given that the PURPOSE of a decentralized currency is to interfere with government monetary policy, then its never going to be accepted.  The 'facilitating criminal blah blah' is a bit of a red herring and is, of course, carefully worded - the PURPOSE of Bitcoin and similar ledgers are public transparency.  Anyone with a computer can see EVERY transaction ever conducted.  What they're really getting at is the 'identification' side - Governments don't want to track money or transactions - they want to track YOUR money so they can tie YOU to criminal activity. In practice, that means they want 'account holders' to be legally tied to their transactions. There really isn't any easy way to do that.  There are 'non' easy ways.

From there, it's pretty much a yes or no question.  If you agree with central monetary policy and like safety over freedom, then bitcoin is definitely not your bag.

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On 10/16/2019 at 5:26 AM, cmilliken said:

Given that the PURPOSE of a decentralized currency is to interfere with government monetary policy, then its never going to be accepted. 

That could be one purpose. Another would be to have a currency with which govt monetary policy can't interfere. Another would be to buy and sell without governmental interference. There could be more.

Your statement is too narrow. More generally, a decentralized currency can interfere with government control over individuals. And of course statists will object.

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8 hours ago, Amati said:

Hmm... insider trading anarchy?
 

Quote

 

Traders in the Chicago pits have been watching these kinds of wagers with an increasing mixture of shock and awe since the start of the Trump presidency. They are used to rapid fluctuations in the S&P 500 index; volatility is common, of course. But the precision and timing of these trades, and the vast amount of money being made as a result of them, make the traders wonder if all this is on the level. Are the people behind these trades incredibly lucky, or do they have access to information that other people don’t have about, say, Trump’s or Beijing’s latest thinking on the trade war or any other of a number of ways that Trump is able to move the markets through his tweeting or slips of the tongue? Essentially, do they have inside information?

Theoretically, market regulators are supposed to be keeping an eye on big trades such as these, to try to figure out whether they are just happy coincidences or whether there is something more nefarious afoot. And they say they do. But calls to the Chicago Mercantile Exchange, where the trades takes place, the Securities and Exchange Commission, which regulates the equity markets, and to the Commodity Futures Trading Commission, which regulates futures contracts, such as e-minis, were answered in different ways. Christopher Carofine, at the SEC, declined to comment. The CFTC did not respond to my inquiries, while a spokeswoman for the CME says the trades in question did not originate from a single source and they were of no concern.

There is no way for another trader, let alone an outsider such as me, to know who is making these trades. But regulators know or can find out.

 

So the bottom line appears to be that the author has no way to know if the trades he said were made by a single source were, in fact, made by a single source. A regulator who can and should know disagrees with his admittedly baseless assertion. Which one should we believe?

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6 hours ago, Hypercapnic Tom said:

Hmm... insider trading anarchy?
 

So the bottom line appears to be that the author has no way to know if the trades he said were made by a single source were, in fact, made by a single source. A regulator who can and should know disagrees with his admittedly baseless assertion. Which one should we believe?

I don’t think I can believe some one who has been ordered by a superior to look the other way, and given the behavior of the administration so far I think that would be hard to argue against.

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7 hours ago, Hypercapnic Tom said:

Hmm... insider trading anarchy?
 

So the bottom line appears to be that the author has no way to know if the trades he said were made by a single source were, in fact, made by a single source. A regulator who can and should know disagrees with his admittedly baseless assertion. Which one should we believe?

Behind every one of these trades is someone who also LOST billions.  The truth will eventually come out.  To paraphrase Hans Gruber, steal a billion dollars, they WILL find you.  

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Congress Questioned Facebook's CEO About Libra
 

Quote

 

"I'm not talking about spin, I'm talking about actual disinformation," said Ocasio-Cortez, as if these are two things that Facebook content moderators could both easily distinguish and police in a fair and unbiased way.

...

Many Republicans were also inclined to meddle in Facebook's affairs. Rep. Bill Posey (R–Fla.) criticized Zuckerberg for policing anti-vaxxer content. Rep. Patrick McHenry (R–N.C.), the committee's ranking Republican, said he had "qualms" about Facebook's practices, though he did not wish to side against "American innovation."

 

Well, they might have asked at least a question or two on the proposed "cryptocurrency" that was the purported topic of the hearing.

Quote

But some of the most absurd questions came from Reps. Maxine Waters (D–Calif.) and Al Green (D–Texas), who went after the CEO for not doing more to promote diversity. Green asked how many of the people working on the Libra project were members of the LGBTQ+ community, raising the question of whether Congress expected Zuckerberg to interrogate his employees regarding their sexuality.

I guess they wanted him to name names and say whether the individuals in question were L, G, B, T, Q, or +.

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Unintentional comedy is often the best kind.

Calling Fortnite Cash a Virtual Currency Was an IRS Error
 

Quote

 

The IRS quickly recognized the need to correct website language that appeared to signal Fortnite and Roblox players were subject to a new disclosure requirement aimed at virtual currency transactions, the agency’s top lawyer said.

The agency on Wednesday removed language identifying Roblox and V-bucks—Fortnite’s in-game currency—as examples of convertible virtual currency. The language was removed hours after Bloomberg Tax asked if gamers who purchased or earned in-game currencies would have to disclose that on their 2019 tax returns.

IRS Chief Counsel Michael Desmond indicated that the inclusion of the video game currencies was a mistake, though he offered no insight on how they ended up alongside Bitcoin on the list of examples.

...

 

I wonder if child labor laws prevent them from hiring some 16 year olds to explain the modern world?

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New Coronavirus Stimulus Bill In Congress Creates U.S. Digital Dollar
 

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...The bill establishes a digital dollar, which it defines as ‘a balance expressed as a dollar value consisting of digital ledger entries that are recorded as liabilities in the accounts of any Federal Reserve Bank or ... an electronic unit of value, redeemable by an eligible financial institution (as determined by the Board of Governors of the Federal Reserve System).’ Additionally, a digital dollar wallet is identified as ‘a digital wallet or account, maintained by a Federal reserve bank on behalf of any person, that represents holdings in an electronic device or service that is used to store digital dollars that may be tied to a digital or physical identity.’

...

Carmelle Cadet, Founder and CEO of EMTECH, a modern central bank technology and services company, is a technology provider in the world’s first live retail CBDC with the Central Bank of Bahamas called the Sand Dollar. She has recently started a new initiative in the U.S. called ‘Project New Dawn’ to ensure the unbanked and underbanked receive economic stimulus payments. Pointing to a FDIC report in 2017 that identified 63 million people that are unbanked and underbanked in the U.S., she notes, ‘If checks are the form of payment, the stimulus is not going to reach many of them. That would be approximately $100B underutilized of stimulus for lower income householders.’

...

 

Hmmm... I deal with some of the "unbanked" people referenced. They have their reasons for not having even a checking account. Not sure this will make those reasons go away, but it's always interesting to see what nerds are up to.

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19 minutes ago, Plenipotentiary Tom said:

New Coronavirus Stimulus Bill In Congress Creates U.S. Digital Dollar

Hmmm... I deal with some of the "unbanked" people referenced. They have their reasons for not having even a checking account. Not sure this will make those reasons go away, but it's always interesting to see what nerds are up to.

I believe that eventually there will be a 'Federal ID' in the US and that there will be a way to deposit money (and take money out) directly.  Helicopter money needs a bucket to catch it.

 

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25 minutes ago, cmilliken said:

I believe that eventually there will be a 'Federal ID' in the US and that there will be a way to deposit money (and take money out) directly.  Helicopter money needs a bucket to catch it.

 

I already have one of those. An older one so it still says "not for identification" on it.

socseccard.jpg

 

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4 minutes ago, Plenipotentiary Tom said:

I already have one of those. An older one so it still says "not for identification" on it.

socseccard.jpg

 

Yup :)

One of those 'analog' models.  I actually got a SS number when I was about 8?  The card got lost when I was about 11 but I had memorized the number.. it's stupid easy.  For the next 30 years or so of my life, I didn't actually have the 'physical' card.  I eventually got around to getting one about 10 years ago.

 

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How Will Bitcoin Lead to More Freedom?
 

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Katie Haun has one of bitcoin's most improbable conversion stories. As an attorney at the U.S. Department of Justice, she prosecuted the two corrupt federal agents working the Silk Road case and created the federal government's first cryptocurrency task force. "I'm the prosecutor who helped put some of the earliest bitcoin criminals in jail," she boasted in a 2018 speech

But while learning about bitcoin as a crime fighter, it dawned on her "how profoundly this technology could change how we do all sorts of things." Haun is now a general partner at the venture capital fund Andreessen Horowitz, or a16z, where she co-leads its crypto funds with over $350 million raised since 2018. The firm is betting on blockchain as a new computing platform that will, among other things, create a decentralized financial system and fulfill the web's original promise as an open network controlled by its users. 

Blockchain computing "feels like the early days of the internet, web 2.0, or smartphones all over again," according to a16z's crypto thesis. Haun also sits on the board of the nonprofit organization overseeing Facebook's cryptocurrency project Libra. At a 2019 congressional hearing, David Marcus, head of the company's blockchain group, assured lawmakers, "Let me be clear and unambiguous: Facebook will not offer the Libra digital currency until we have fully addressed regulators' concerns and received appropriate approvals."

In their embrace of regulation, Haun and Marcus are at one extreme of the cryptocurrency community; on the other end, are the so-called bitcoin maximalists who have a name for projects like Libra: "shitcoin."

"I would not be interested in bitcoin if governments didn't want to ban it," the software developer Pierre Rochard tweeted in 2017.

...

 

Heh. Said it pretty well there, Pierre!

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More back door men at DOJ
 

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The Department of Justice has been busy thinking about how to deal with cryptographic technologies. This past month, DOJ has issued two major statements on privacy-preserving tech, one of them an international rallying cry to build government backdoors into secure communications and the other a "clarification" of federal policy surrounding cryptocurrency applications. Unsurprisingly, both documents view privacy-preserving technologies as impediments to DOJ operations.

The encryption statement was mostly a reiteration of long-standing government issues with secure communications, this time wrapped in the packaging of saving children from criminals. Signatories from the Anglo governments ("Five Eyes") plus India and Japan again asserted that "public safety [can] be protected without compromising privacy or cyber security." This is obviously true in the abstract, but not when the "protection" in question is a government backdoor that necessarily compromises privacy and security. No new ground was broken here.

...

There is no question that criminals may choose to use cryptocurrency, and this requires new law enforcement strategies. The DOJ extols several crackdowns on criminal activities: There is Operation DisrupTor, which took down international darknet drug markets, the Welcome to Video bust of child exploitation merchants, and the dismantling of terrorist financing campaigns. It is fantastic that violent criminal enterprises have been taken down, and blockchain forensics play a large role in these law enforcement successes.

In other words, like with encryption in general, while cryptocurrency does create new challenges for law enforcement, it also offers new opportunities for creative yet constitutional investigations of clearly anti-social criminal activities.

As someone who thinks a lot about privacy and security holes with cryptocurrency, it's interesting to see outsider perspectives that assume things like bitcoin offer strong privacy by default. As a series by privacy researcher Eric Wall makes clear, perfect cryptocurrency anonymity is almost comically hard to achieve even with custom-built "privacycoins" offering stronger anti-surveillance tools. There are so many ways that users can leak identity data to powerful and motivated adversaries like the DOJ—if the blockchain doesn't get you, your IP address, wallet software, poor address hygiene, and even your sleep schedule trivially could. It's no wonder the DOJ can boast of so many crypto-seizures.

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So are there 7 Eyes now?

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Money Is Social Media
 

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Premium cardholders have great credit and perhaps deeper pockets. Merchants want their business. They want their business so much that they are willing to pay extra interchange fees to bag them. Of course, these costs are borne by someone. Effectively, other customers—including less well-off ones—foot the bill for these wealthier customers' lifestyle perks in the form of higher final prices.

Then there are the partially or wholly unbanked customers stuck with fee-laden payment cards that do nothing to help them build up credit. These people get nickel-and-dimed for the privilege of being able to pay bills online—or they eschew online payments altogether. If money is communication, cash is a vernacular.

This cohort gets doubly walloped by a currency system that is also oriented to the benefit of the elite. As the recent COVID-justified monetary policy makes clear, people who are well-off and well-connected tend to benefit first from central bank interventions. Everyone else? Record stock market highs are irrelevant when you don't even have a bank account, let alone a 401(k). The regressive effect of monetary manipulations—the way they disproportionately harm the already underprivileged—is known as the "Cantillon effect."

Power dynamics also affect who is able to get paid. Merchants themselves carry risks to financial institutions: Sketchier ones may attract more requests for payment reversals or "chargebacks" that impose higher costs on banks. So high-risk merchants—peddlers of charges that customers may later dispute, such as pornography or gambling or shoddy wares—are funneled into their own market segments.

Sometimes, payment processors decide they would rather not deal with such high-risk merchants at all. As New Money points out, the platformification of online payments has imbued services like PayPal and Patreon with great social power. Whether due to social pressure or good old-fashioned aversion to "financial risk," platforms can now unilaterally decide whether someone gets paid.

It is precisely because legacy payment methods are susceptible to such controls that bitcoin was created. Cryptocurrencies in this vein are censorship-resistant by design: No party can prevent any other from transacting on the network. Better still, they are Cantillon-resistant: Elites cannot manipulate the money supply to enhance their power.

Cryptocurrency would seem of natural interest to New Money's examination, yet it barely receives passing mention. When asked by a woman in the industry for a way to guarantee "reliable payments for sex workers," the book recommends only "cash and checks."

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Hah! Checks? Really? So if a customer writes a bad check or stops payment on a good one, a hooker is supposed to go to the cops and say, "I'm a hooker and this guy...um... stiffed me."

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Elon Musk Makes Bitcoin Waves
 

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For Elon Musk, whose hatred for short-sellers blazes hot enough to reforge Mjölnir a dozen times over, the millions in losses suffered by shorts after the Tesla CEO changed his Twitter bio to “Bitcoin” it must feel like Christmas and his birthday rolled into one. 

That one word addition caused the price of bitcoin to spike to a 10-day high of $38,020 and sparked $387 million worth of short liquidations on major exchanges including Binance, Bitfinex, BitMEX, ByBit, Deribit, FTX, HuobiDM and OKEx. 

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However, sentiment turned bullish after Musk changed his Twitter bio and tweeted: “In retrospect, it was inevitable.” The Tesla and SpaceX CEO, who has made no secret of his loathing for short-sellers, may not haven intended to have caused the liquidations, but may have popped the cork on a bottle of champagne after viewing the carnage his bio change wrought.

To document Elon’s ostensible nod to the leading cryptocurrency, F2Pool, currently the largest mining pool by hashrate, embedded the tech mogul’s latest tweet in Bitcoin block 668,197. 

 

As for that last line quoted, dweebs will be dweebs, gotta love 'em.

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Freedom Money
 

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In the past few months, Belarusian activists have used bitcoin to defy the regime by sending more than 3 million dollars of unstoppable money directly to striking workers, who then convert it locally to rubles in peer-to-peer marketplaces to feed their families as they protest the country's dictatorship.

In October, a feminist coalition in Nigeria raised the equivalent of tens of thousands of dollars in bitcoin to buy gas masks and protest equipment as activist bank accounts were being turned on and off.

In Russia, the opposition politician Alexei Navalny has raised millions in bitcoin as Vladimir Putin maintains strict control over the traditional financial system. Putin can do a lot of things, but he can't freeze a bitcoin account.

In Iran and Palestine and Cuba, individuals face sanctions or embargoes because of the misdeeds of their corrupt rulers. Bitcoin gives them a lifeline for earning income or receiving remittances from abroad.

Some Venezuelans, having watched their country's currency evaporate due to hyperinflation, are converting their resources to bitcoin's digital format and then escaping. With their savings secured by a password that can be stored on a flash drive, phone, or even memorized, they've started new lives in other countries, taking advantage of a technology that refugees throughout history could only dream about.

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Maybe you don't need bitcoin. Maybe you don't understand bitcoin. Maybe PayPal, Venmo, or your bank account serves your needs just fine.

But don't write off bitcoin as simply a vehicle for financial speculation. For millions of people around the world, it's an escape hatch from tyranny—nothing less than freedom money.

 

No wonder authoritarians hate it so much!

 

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Bitcoin dives as Tesla’s Elon Musk reverses course on accepting crypto
 

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“Tesla has suspended vehicle purchase using Bitcoin. We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions. Especially coal, which has the worst emissions of any fuel,” Mr Musk, who is also the co-founder of the company, said on Twitter.

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Last month, researchers at Cambridge University estimated that the electricity consumption of the Bitcoin network is almost 120 Terrawatt-hours per year, more than the energy consumption of the UAE at 119.45 Terrawatt-hours, and on course to overtake Pakistan.

Mr Musk said he is open to other digital currencies that consume less energy than Bitcoin.

“Tesla will not be selling any Bitcoin and we intend to use it for transactions as soon as mining transitions to more sustainable energy. We are also looking at other cryptocurrencies that use less than 1 per cent of Bitcoin’s energy/transaction,” he said on Twitter.

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Hmm... He didn't know about the energy usage way back in January?

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Tulips 1637,
South sea shares 1720,
Railway mania shares  1840s,
All shares 1929 when the public went share buying mad..
or today, Bitcoin and online share trading.
Just needs another Musk to pull out of bitcoin and they start a cascade and the value will crash..

Oh and it was just announced inflation doubled in April in the UK, huge rises in inflation are normally prior to a crash..

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Trump calls Bitcoin a ‘scam against the dollar’ that needs to be ‘very high regulated’

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Former Guy Donald Trump called Bitcoin a “scam against the dollar” and urged US regulators to take action to monitor it on Monday.

Heh. Maybe the dollar is a scam against Bitcoin.

 

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Billionaire Jack Dorsey, co-founder of Twitter and Square, is extremely bullish on the future of bitcoin, the largest cryptocurrency by market value.

“Bitcoin changes absolutely everything,” Dorsey said Friday at the Bitcoin 2021 Conference. “I don’t think there is anything more important in my lifetime to work on.”

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Paul Krugman's 10-Year History of Being Wrong About Bitcoin
 

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In addition to calling bitcoin evil, Krugman has also dismissed it as "libertarian derp" on multiple occasions. He even took pleasure in the crashing bitcoin price in early 2018. Notably, some of Krugman's negative comments toward bitcoin popped up around the absolute bottoms of two consecutive cryptocurrency bear markets. In other words, it may be a good time to buy bitcoin whenever you see Krugman taking a victory lap.

Unfortunately for Krugman, the "libertarian derp" cryptocurrency hit a new all-time high once again in 2021, 10 years after his initial criticisms of the crypto asset were first published in The New York Times. Instead of acknowledging the reasons for bitcoin's staying power, however, it appears that Krugman will continue to claim there is no utility for this technology and keep dismissing bitcoin as a cult that can survive indefinitely.

Fortunately for bitcoin, it can rebut Krugman by simply continuing to exist and thrive in the marketplace.


 

You'd think Trump's agreement would be enough to make Krugman question his own ideas. Nope.

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I'd get the hell away from bitcoin if I had any. It has been deemed critical to the operation model of the ransomware pirates and pretty much everybody is looking a big ol can of whoop-ass on that shit. 

 Bitcoin carries no essential function outside of criminal ops and the fable bitcoin is untraceable has been fractured. The makings of a Bambi v Godzilla scenario.   

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1 hour ago, Mark K said:

I'd get the hell away from bitcoin if I had any. It has been deemed critical to the operation model of the ransomware pirates and pretty much everybody is looking a big ol can of whoop-ass on that shit. 

 Bitcoin carries no essential function outside of criminal ops and the fable bitcoin is untraceable has been fractured. The makings of a Bambi v Godzilla scenario.   

I was hopeful it might provide competition for the merchant service provider fees on credit card transactions, helping businesses and international ransastion fees, helping travelers.    No such luck, it’s too volatile for commerce.   As you said, aside from speculation the only purpose Bitcoin and its elk have is criminal transactions.   They potentially destroy a nation’s ability to manage its currency and control its economy.   They need to go, 

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10 hours ago, Mark K said:

I'd get the hell away from bitcoin if I had any. It has been deemed critical to the operation model of the ransomware pirates and pretty much everybody is looking a big ol can of whoop-ass on that shit. 

 Bitcoin carries no essential function outside of criminal ops and the fable bitcoin is untraceable has been fractured. The makings of a Bambi v Godzilla scenario.   

The old "only criminals find it useful" argument was also recently used by the FBI in looting safe deposit boxes. The thing is, it's not true.

9 hours ago, Lark said:

I was hopeful it might provide competition for the merchant service provider fees on credit card transactions, helping businesses and international ransastion fees, helping travelers.    No such luck, it’s too volatile for commerce.   As you said, aside from speculation the only purpose Bitcoin and its elk have is criminal transactions.   They potentially destroy a nation’s ability to manage its currency and control its economy.   They need to go, 

You're saying it, Mark's saying it, Trump's saying it, many people are saying it. But this thread is replete with examples of the utility of cryptocurrencies. Even the Fed sorta agrees, which is not great news.

But many people should take note of this part:

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Much of the push for government-run digital money is driven by fears of those private cryptocurrencies. Sen. Brown, for example, pointed out that bitcoin "can be used for illegal activity." (In fact, cash is still the preferred method of choice for illegal transactions. According to a report by Chainalysis, illicit behavior accounts for less than 1 percent of all crypto activity.)

 

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On 6/14/2021 at 3:20 AM, Excoded Tom said:

The old "only criminals find it useful" argument was also recently used by the FBI in looting safe deposit boxes. The thing is, it's not true.

You're saying it, Mark's saying it, Trump's saying it, many people are saying it. But this thread is replete with examples of the utility of cryptocurrencies. Even the Fed sorta agrees, which is not great news.

But many people should take note of this part:

 

 Same old story, a few bad apples ruin things for everybody. 

 

 

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11 hours ago, Mark K said:

 Same old story, a few bad apples ruin things for everybody. 

A few? I thought that

 

On 6/13/2021 at 7:56 PM, Mark K said:

Bitcoin carries no essential function outside of criminal ops

So maybe there are a few good apples?

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Bitcoin: 'A Weapon for Us To Fight Oppression'
 

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When Fodé Diop was a high school senior growing up in Senegal, he was accepted to Emporia State University in Kansas to study engineering and play basketball. But before enrolling, the value of the tuition money his father had set aside was cut in half overnight because of a backroom deal spearheaded by the International Monetary Fund and the French government, which still controls the currency of more than a dozen African countries due to a treaty ratified at the end of World War II.

His experience is what led to Diop's current career as a software developer working to make bitcoin easy to use as a medium of exchange for anyone in Senegal with a smartphone.

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If the French could suddenly cut the value of our dollars in half, people might appreciate the value of a currency that doesn't have that feature.

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