Drug Site Silk Road Says It Will Survive Bitcoin's Volatility 293
Sparrowvsrevolution writes "Bitcoin's recent spike and then collapse in value has convinced many that it's too unstable to use as a practical currency. But not the founder of Silk Road, the black market drug site that exclusively accepts Bitcoin in exchange for heroin, cocaine and practically every other drug imaginable. Silk Road's creator, who calls himself the Dread Pirate Roberts, broke his usual media silence to issue a short statement that Silk Road will survive Bitcoin's bubble and bust. The market's prices are generally pegged to the dollar, with prices in Bitcoin fluctuating to account for movements in the exchange rate. And Roberts explained that vendors on the site have the option to also hedge the Bitcoins that buyers place in escrow for their products, so that they can't lose money due to Bitcoin's volatility while the drugs are in the mail. As a result, only about 1,000 of the site's more than 11,000 product listings were taken down during the recent crash."
Speculation (Score:5, Insightful)
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And leftwingers think that Taxing and spending brings Utopia and wealth.
See how easy it is to paint with broad strokes?
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I don't think any of them thinks it brings wealth. Equality perhaps, but not wealth.
Re:Speculation (Score:4, Insightful)
Equality of results (not equality of opportunity) which is their version of "Utopia", and impossible, and tyranny of a sort. It punishes success, rewards failure, by definition.
I believe in equal opportunity, given that is possible, in a truly fair and just society. Look, I have as much if not more problem with our current justice system as most left wingers. It isn't fair. There is too much cronyism, on both sides of the isle.
Re:Speculation (Score:5, Interesting)
Equality of results (not equality of opportunity) which is their version of "Utopia", and impossible, and tyranny of a sort. It punishes success, rewards failure, by definition.
Depends on your understanding of equal opportunity, let's take college education as an example. Is it "equal opportunity" if the B-grade son of a minimum wage worker goes to college and the C-grade son of a millionaire doesn't get in? Or is it that they both had the "equal opportunity" to pay Harvard $40,000/year in tuition? If a teenage kid develops a serious condition before he's had any chance to pay for his own medical insurance does he deserve the same quality of life if he's the son of a minimum wage work or a millionaire? Or is it equal opportunity that their parents both had "equal opportunity" to pay for an insurance with good coverage? The words are the same but the meaning is very different.
The plan economy died with the Soviet Union decades ago and despite the rumors of socialism in Europe doctors are paid very different than burger flippers, there is competition to provide many if not most goods and services. The difference is the cost is often shifted from the user to the tax payer, particularly at the lowest end to provide universal services to those who can't afford them. But I wouldn't call giving someone who's fallen down help getting up rewarding failure, whether they tripped on their own shoelaces or got pushed to the gutter. Then again offers to bring a mattress, food and water so they can stay down more comfortable might. Unless they have broken legs, in which case they don't need tough love to pull them back on their feet but real help to recover. And some can't recover, but we can give them a decent life.
It's easy to become a capitalist when you're on the winning side of the equation. I'm not so selfish to believe that I "deserve" a better life than an Indian or Chinese or worse a third world country but if you lay out of a plan to average the standard of living across the world then hell yeah expect opposition. The rich want to stay rich, whether it was earned fair... meh, like anyone chose to be born a son of a poor, non-literate sheep herder in Africa or not. I've run into many people with various physical and mental disabilities and the only thing I can say is that I'm happy to be relatively healthy. You're right, I'm quite probably going to be a net tax contributor unless I happen to live to 100+ or have some hyper-expensive medical issues down the road. I still think I got the better end of that deal.
Re:Speculation (Score:5, Insightful)
"Providing" basic needs, means they don't have to provide for themselves. And you think that is humane, but it is the worst kind of tyranny, dependance. There is a reason why National Parks posts signs saying "don't feed the bears". Why we recognize this with bears and not humans is baffling.
Taking from productive members of society, by threat of force, to provide for people unwilling to provide for themselves, is the tyranny I speak of . Do you think that is okay?
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There's a difference between providing services where society benefits from universal coverage and costs go down and a welfare state where unproductive members of society are entirely carried by the productive members. Entirely idealistic Socialism is just as wrong as entirely idealistic Capitalism. What we need is a pragmatic approach to finding the correct balance.
What people seem to forget when they're complaining about socialism is that they've already bought into it. Taxes pay for our police, firemen,
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You do realize there is a middle ground and other options between a full-on welfare state and mercy killing the elderly, right?
I will say this: while I think government charity may be better than nothing, I think it is very valid to point out that we are becoming dependent on the very same organization that we are also afraid to trust with our privacy and other things.
A major philosophical problem I see is that people believe that either the government has to do something, or it's right back to Gilded Age s
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Did you really just claim that slavery is necessary for a civilized society?
Charity is necessary for a civilized society, but charity is the willing gift of the donor, not anything that the receiver is entitled to.
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Except Gold has value regardless of its use as a currency.
Gold is rare and useful. It will never 'bust' as long as those two things are the case. BitCoin, for example, wouldn't exist without Gold because there would be no CPUs worth mentioning, and nothing fast enough to due the required calculations in any meaningful sense of the word.
Gold is used in many things. Drugs. Electronics. Industrial processes. Medical devices. Jewlery. (the list is tremendously long) and ... as a form of currency universa
Re:Speculation (Score:5, Insightful)
Looking at historical gold prices, I'd estimate that if gold was priced on intrinsic value alone, cost per oz would be less than a tenth of what it is.
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What you are claiming is not dissimilar to saying the greenback with never hyperinflate because of the intrinsic value of the paper it is printed on.
It's cloth, actually.
Currency isn't printed on paper, it's roughly 75% cotton, 25% linen. [treasury.gov]
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Except for the currency printed on plastic [wikipedia.org].
U.S. currency is printed on paper (Score:4, Interesting)
It's cloth, actually. Currency isn't printed on paper, it's roughly 75% cotton, 25% linen.
U.S. currency is printed on paper
Cloth [wikipedia.org] is a flexible woven material consisting of a network of natural or artificial fibres often referred to as thread or yarn.
Paper can be made of many things including cotton and linen. Paper [wikipedia.org] is a thin material mainly used for writing upon, printing upon, drawing or for packaging. It is produced by pressing together moist fibers, typically cellulose pulp derived from wood, rags or grasses, and drying them into flexible sheets.
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"...gold's value is inflated by speculators and wealth storage..."
Gold's usefulness as a medium of wealth storage is definitely a huge portion of the value. Ten years from now (barring some unprecedented discovery or new matter transmutation technique) it will STILL be a huge portion of the value. Wouldn't that qualify as "intrinsic" value?
99% of most people too. don't let it bother you. (Score:3)
So in terms of utility, it is useless^Wworthless.
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I can't answer. But there are more valuable things then gold to own and the smartest richest people on the planet kind of technically more or less own them.
Like big corporations. Stock. Land. Contracts with the DoD. Things like that are far better to "have" then gold. I would say diamonds are a start as well. I wouldn't stock gold unless I was really into making jewelry or using it to produce electronics. And because of golds "volatile nature' I would stock just enough to run whatever business I was making
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Why though?
Assuming the GP's figure is close to accurate, "99% of the world's gold is sitting in a vault", it explains itself.
The rarity of gold IN CIRCULATION combined with its physical properties (ie. it's desirable for many applications) sets its base price, and the higher the rarity (assuming there's still enough out there to be useful), the higher that price. So, stockpile a lot of it and lock it away, and what remains grows in value.
This is actually the same thing that happens to bitcoin, and is a big part of wh
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Gold is rare and useful.
Not really. IIRC about 5% goes towards industrial use (CPUs and such).
The rest goes towards bullion or jewelry. In the past decade most of the gold jewelry has been sold to India and China for things like gold chains – which is sold by weight – no premium given for artistry. Both of those countries have a under developed banking / investment system, so I would trim the percentage going towards jewelry. And most gold is sitting in vaults as bullion. If released it would crush the market – so it is an artificial restriction in terms of useful industrial use.
Like fiat currency the only reason why gold has much in the way of value is that everybody values it. (It’s harder to debase then fiat currency which is a plus.)
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You didn't hear it from me, but Gold is going to completely burst in the next few years it's "At that point". Just the other day we saw the first drop in years.
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And Gold. Fox news was the agent of a massive pump-up in the price of gold over the last couple years, looks like that bubble is now bursting too.
Pump and dump has been a common technique throughout history for those "in the know" to make money. Buy low, talk up what you own, unwary investors look at the price rise and jump on, you slowly sell at a profit. Don't be fooled, bitcoin is subject to the same manipulation as gold, silver, stocks and the like. Actually, Bitcoin is MORE subject to such because it is by definition unregulated.
Go ahead and trade in bitcoin if you want, just don't be fooling yourself into thinking it is somehow better than d
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Yeah, the real question is how much more risky it is. Once you can quantify risk, you can know what a sound investment is or not. Responsible, aware, forward thinking speculation can be good for a market, there's just not a lot of it.
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Shhhhh! I'm trying to talk this thing down right now....
You do have an excellent point... The proper strategy could be profitable here.. Does anybody sell BTC futures yet?
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No they are not.
“Dollars, euros and other fiat currencies” have central banks that can intervene and do try to manage the currency. When inflation / deflation spikes they can create / destroy currency, money, and near money. (Does this mean they can debase the currency, unlike BitCoin? Yes)
Gold, which I think is more like BitCoin, has the advantage of – for the lack of a better word – mass – that resists rapid changes. A wide user base, lots of the stuff gathering dust in vaults or grandma’s jewelry.
Both have deep forward and futures market they also lend long term stability. Maybe one day BitCoin will get there – but right now it is an interesting experiment in my opinion.
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Your commenting on a story about how bitcoin spiked and plummeted to worthlessness in the timespan of a day ... and your comment is about how stable BitCoin is?
What world do you live in where that makes sense?
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âoeDollars, euros and other fiat currenciesâ have central banks that can intervene and do try to manage the currency.
Yes, but you're assuming their goal is stability. In reality, their goal is to cause more or less precisely timed instabilities from which certain parties can profit.
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...have central banks that can intervene
Are you sure? Central banks only come after the fact, when regular banks have already poofed the money up. They can only play with some interest figures, which are not very influential. I am afraid you greatly over-estimate the power of a central bank.
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Yes, I am sure. It is their bread and butter – what they do every day. It does not generate the headlines as banks burn to the ground but it is one of their central mandate. I was speaking broadly, so I don’t know what aspect you are specifically referring to, but inflation, interest rates, and FX rates are all linked to together. Affect the first 2 and you will affect the 3rd.
They run monetary policy, which outside supply shocks (such as the oil crisis of the 70s) has the greatest influence on
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Dollars, euros and other fiat currency are just as vulnerable.
Bullshit! Currencies backed by the economic activity of entire 1st-world nations are nowhere near as vulnerable.
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Really? A dollar is only worth what you can buy with it. It can become nearly worthless overnight. It is only paper and your faith in it is all that gives it value.
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Really? A dollar is only worth what you can buy with it. It can become nearly worthless overnight. It is only paper and your faith in it is all that gives it value.
That's a foolish and tired cliche. It has centuries of history. People realize that society would collapse if we just gave up on the dollar overnight. I'm no fan of our current president but I certainly know that the checks and balances in our system would make it virtually impossible for his administration to ruin the currency. (fears which propped up gold) There is apocalyptic military might backing it up. People have been making that argument since we went off the gold standard (not the first time in U.S. history, btw...was a common practice during wartime) and most realize these things (at least subconsciously) and rest easy that their fellow citizens will not allow the economy to spontaneously combust and return to the barter system.
Unless you're a college student who is just waking up to how the world works, it's ridiculous to make that statement. Adults will simply reply: We know, and we don't care.
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Really? A dollar is only worth what you can buy with it. It can become nearly worthless overnight. It is only paper and your faith in it is all that gives it value.
A dollar is also legal tender. Whether people have faith in it or not, they're required by law to take it as repayment of my debts.
Re:Speculation (Score:4, Insightful)
Massive ammounts of contracts are written for pre-determined ammounts of dollars, euros, pounds etc. That makes the value of those currencies somewhat "sticky", yes it does change over time but usually fairly slowly. If it changes too rapidly governments will sometimes step in to halt the shift.(e.g. http://www.guardian.co.uk/business/2011/sep/06/switzerland-pegs-swiss-franc-euro [guardian.co.uk] )
Bitcoin has none of that, it just floats to whereever supply and demand take it. Speculators consistute some of that supply and demand but not all of it. Depending on their strategy they may either increase or decrease volatility
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Dollars, euros and other fiat currency are just as vulnerable.
Not exactly, dollars, Euros, Yen etc are not as vulnerable as bitcoin for a number of very important reasons. They certainly can be mismanaged to the point where they become worthless, but due to the world wide market and trade in say dollars it would take some time for any of the major currencies to go to totally worthless. Bitcoin could do that literally overnight.
Bitcoin also suffers from being backed by nothing more than the willingness of folks to trade for them. All real currencies in circulation
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Why blame the victim? The rise and fall in price (PLEASE, not "value". There's a difference, you know) is due to speculation, not to the currency itself. Dollars, euros and other fiat currency are just as vulnerable.
Once again, the pro-bitcoin problem takes a massive problem and attempts to diminish it. The combination of unregulated markets and deflationary currency creates a huge problem with regards to human nature. If we were all robots and behaved how the currency wants us to, it wouldn't be a problem. But we're not. We will speculate. We will hoard. We will look at the currency late and go "fuck you, I'm not going to make the early adopters rich" which was one of the flaws of the original design. The problems wit
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"...the pro-bitcoin crowd takes a massive problem..."
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They are, the full faith and credit of the USA.
Bitcoins have the network backing them as their source of value.
One of these is easy to replicate the other is not.
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"They are, the full faith and credit of the USA."
Buahahahah
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Please elaborate.
So far the USD seems plenty spendable and far more useful than bitcoins.
You laugh at that, but I laugh at folks who think bitcoin should be anymore valuable than litecoin or any other replacement.
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Faith and credit. When the "Credit" reaches a breaking point, "Faith" will no longer apply. Too many people think that the "credit" is fine, even though there's 54K debt for every person in the US. THIS is unsustainable, but okay, Obama says we don't have a spending problem.
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Look up "Quantitative Easing"
The only reason the federal government can borrow at such absurdly low rates is because the Federal Reserve is creating money out of thin air to buy up treasury securities.
If the federal government had to sell over $1T worth of debt on the open market every year, yields would be considerably higher.
The very existence of the 'QE' program is a signal that demand for U.S. debt at these rates is drying up.
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The credit of the USA is itself issued in dollars, so you can't say the dollar is backed by that. Say it's "backed" by taxes or the military or anything else, but credit isn't an option. And BTW I'd say you can't back a currency by levelling taxes in it. That might create demand for it, but in the most extreme scenario of total Bitcoin success combined with total govt/people disconnect, then nothing stops you living entirely in Bitcoins and come tax time buying dollars with them, giving them to the governme
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Re:Speculation (Score:4, Funny)
Its backed by the value of the sexual favors your wife/girlfriend/hooker will perform in exchange for jewelry.
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Scarcity, conductivity, high mass, low melting point and imperishability... but mostly the first and last in the list.
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Many people here think that dollars are backed by something
Dolllars are backed by something:
https://en.wikipedia.org/wiki/Legal_tender [wikipedia.org]
https://en.wikipedia.org/wiki/Tax_law [wikipedia.org]
Now that we are past that, can you tell us what Bitcoin is backed by?
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i fail to see how tax law is related to this
The question was, "What backs USD?" For a currency to be "backed," there must be some guarantee about the currency's utility. That is what a tax law does: it guarantees that you can use a currency to meet a legal obligation (tax payment).
It's not like people woke up one day and said, "Pieces of paper with pictures of dead presidents are a great currency!" The fact that the government will only deal in dollars and the existence of legal tender laws is the reason dollars are the currency of the US.
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BTC are backed by the very same trust that allows exchange for goods using US Dollars.
Using BTC is indeed a way to extinguish some obligations (if i want to buy a good, the buyer is obligued to give it to you and you are obligated to pay the price) between parties that allows them. Also i fail to see how tax law is related to this, since the whole point of BTC is being unregulated currency so taxes play no role whatsoever on any transaction involving bitcoins.
While I do recognize that the trust behind us dollars is greater than in BTC, the issues they face are common. They are just different in magnitude.
Tax law is related to the value of the dollar because you can't pay your taxes is BTC, yen, Euros, precious meddles... As far as Bit-coin transactions exempting themselves from taxes just ask Al Capone about exempting yourself from taxes. The order of magnitude in stability, the ability to use it to pay ALL debts both public and private, and the backing of the largest economy in the world are the advantages the dollar has over the Bitcoin. Bit-coins are little more then Disney dollars with less stability.
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Gold is also a fiat currency.
You want a currency with actual value? go back to using a currency you can eat.
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Well, it is the definition of the current currency, so I don’t think it is prerogative.
As for whom? Those would be Democrats – either during Lincoln or Nixon’s presidency.
I sell actual things in Bitcoin (Score:3, Interesting)
I sell physical goods and accept Bitcoin as a payment method. The volatility doesn't bug me at all. While it's only a tiny percentage of overall sales, it's still exciting to see a currency that can actually become a true bartering agent that is freed of non-market forces.
If a seller is concerned with volatility, they should consider not selling their received BTC for fiat currency. It's the number of "we accept bitcoin" sites that accept currency and then immediately convert it to fiat that is one reason for the downward pressure.
I blogged about it the other day, in how I wish governments would just make BTC to fiat currency transactions illegal [2abd.com]. It would be a great step in reducing volatility and decoupling BTC from the regulated markets.
Re:I sell actual things in Bitcoin (Score:5, Insightful)
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Bingo. I may be aligned with the anarcho-capitalists, but I also have no issue with government regulating the people who want government.
I don't care for money stability, I just want a bartering medium that is freed from the pressures associated with money. Bitcoin is unlikely to fund government programs -- and if the day comes that a commodity currency becomes official, it will certainly restrict government to acting within their means.
I also appreciate that Bitcoin doesn't have the money multiplier effe
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So you want to back to what, 4,000 B.C? Yeah, that will work out well.
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I'd be happy to throw back just to the 1800s or so -- when poor people could actually save their way to wealth, where credit addiction didn't lead to thrill-seeking behavior addiction, and where the money supply wasn't a medium to fund warfare and welfare entitlements benefiting the rich and powerful.
Business regulations, money regulations and savings dilution aren't modern in any way, but they've become the norm. I'd rather see all 3 go away, or at least just become part of the nanny-state economy, not my
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I'd be happy to throw back just to the 1800s or so -- when poor people could actually save their way to wealth
That is the funniest thing I've read all day, thanks, it makes a change from the death and bombs.
I'd rather see all 3 go away, or at least just become part of the nanny-state economy, not my economies.
There is no separate economy that belongs to you. You are either in society and the actual economy, or you can live on a desert island somewhere and rot.
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...
Why would you go back to the 1800s to do that when you can ... just do it today?
You're blaming optional things that you don't have to participate in on your reason for not being able to save.
If you want to save your money ... SAVE IT. If you don't like credit cards ... DONT USE THEM. They are not required.
You're just whining about shit you're too lazy to actually use.
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Saving money is worthless. Name a safe secure means of saving money, that doesn't lose value over time due to inflation. Stocks aren't safe, high risk bonds are not safe, savings in a bank loses value over time. In order to save, AND not lose value, you have to place large portions of your wealth into things that either are intrinsic value (like Real Estate, Gold etc).
The problem is, that there isn't any "safe" place to put money that doesn't lose value over time. Bitcoin WILL change this, even as volatile
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Welcome to reality. The economic system is setup to promote GROWTH, not savings. There are so many people in the world right now who need jobs and jobs require growth. We can debate the folly of unlimited all the time growth, but that is not the point I am getting at here.
The point is that as a society, we need people who are engaged with each other. Savers are not engaged. They are sitting on their toys and not sharing them.
The larger issue for society is the retirees are getting screwed. This is wha
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yes, finally someone gets it. LABOR is the primary source of value in the economy. Stabilize the economy by increasing the value of labor, not just by increasing pay, buy by increasing pay as a percentage of corporate income.
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If anything BTC is vastly more vulnerable to money multiplying effects and will only become more so if it does expand in usage. Multiple "banks" could be operating on the same reserve and nobody would know until one failed and suddenly all of the
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Nothing about bitcoin would prevent fractional reserve banking, however the nature of bitcoin would make it trivial for a reckless bank to extend their reserve all the way down to 0% and not disclose this until and unless a run on said bank caused a bank failure.
For fractional reserve banking to work the the bank needs to have a means of investing (whether through loans or equity) which has a near certainty of a positive overall return in the currency they are working in. Given bitcoins wild swings in value relative to other currencies and comodities this is likely to be virtually impossible to ensure.
As such i'd expect that even if it was run honestly and transparently any fractional reserve bitcoin bank is very likely to go bankrupt.
I also expect that we will see
Re:I sell actual things in Bitcoin (Score:5, Insightful)
I blogged about it the other day, in how I wish governments would just make BTC to fiat currency transactions illegal. It would be a great step in reducing volatility and decoupling BTC from the regulated markets.
That sounds to me like a sure way to kill bitcoins. If I accept bitcoins as payment, and no one who sells something else I want to buy accepts them, then the bitcoin has no value for me.
Basically, you want the company store (Score:2, Insightful)
I own my sole to the company store has deeper meaning then just a song lyric. Mine companies used to pay people not just not enough to survive (so they had to borrow credit from the company store and then be forever in debt) but often in company currency, that could only be spend in the company store. It is a way to enslave people, not free them.
But ah... it was the GOVERNMENT that freed these people by enforcing that salaries should be payed in fiat currencies. So basically, you want to reverse that. Here
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I own my sole to the company store...
That is funny on so many different levels.
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You load sixteen tons and what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store
(etc.)
Owing your soul to the company store has been transitioned from a condition of debt to a single company to a condition of debt to multiple parties. Instead of debt to the mine it's now debt to a variety of banks for a variety of purposes, like medical expenses, student loans, and mortgages. The government didn't object to people being in a condit
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When you meet a libertarian, remember, the oppression of government is not what he objects to, it is that it is the government doing the subjugation and not him.
That's not always true. There actually are some people out there who don't want to reduce the power of government because they want it instead; they want less coercion all around, and would prefer nobody to be waving guns at all. Maybe theirs is a mad quest, maybe it isn't, but not all of them want to be the boss instead.
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Instead, we are in debt to our government, to the tune of 55K per person. And you seem okay with it, or are ignorant of that fact. There is no way to tax the rich enough to cover that debt. The Company Store is now the Federal Government.
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Not really. A lot of libertarian ideology is actually decent. Its just the economic aspects that are fucktarded. Unfortunately many libertarians only care about the economic aspects, liberties be damned.
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You know why "some people sold themselves into slavery in order to keep their families from starving"? Because somebody else owned all the land, and houses, and farm implements that they'd need to work. A slave who sells himself into slavery proves he/she is perfectly capable of working hard to support themselves and their family; they would have made perfectly fine free citizens working their own land with their own tools. But because authoritarian oligopolist fuckers like you decide that society works bes
Re:I sell actual things in Bitcoin (Score:5, Insightful)
I sell physical goods and accept Bitcoin as a payment method. The volatility doesn't bug me at all. it's only a tiny percentage of overall sales...
That is because your risk is very limited. If you had a significant amount of your sales in Bitcoin you'd probably think differently; since your risk exposure would be much higher.
If a seller is concerned with volatility, they should consider not selling their received BTC for fiat currency.
No, they should immediately convert it so they assume no volatility risk.
It's the number of "we accept bitcoin" sites that accept currency and then immediately convert it to fiat that is one reason for the downward pressure.
That's called market forces.
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Since my financial stability for the future doesn't correlate with income nor even profit, I think my risk is pretty low. Even if volatility continues, and even if my businesses took in 50% of their revenues in BTC, I still wouldn't see any actual harm. The businesses have been around for decades, and they're self-sufficient and stable.
Converting BTC to fiat currency puts a sell-pressure on BTC. Holding BTC would reduce the selling supply, thereby reducing volatility from the sell side. It's the same wi
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Since my financial stability for the future doesn't correlate with income nor even profit, I think my risk is pretty low. Even if volatility continues, and even if my businesses took in 50% of their revenues in BTC, I still wouldn't see any actual harm. The businesses have been around for decades, and they're self-sufficient and stable.
Since I know nothing about your particular business I'll simply generalize that most business cannot afford the risk inherent in Bitcoin volatility. At some point, the loss in Bitcoin value means you are not taking in enough to cover costs and start burning reserves. Companies hedge their bets to reduce volatility. That is why derivatives exist to reduce volatility risks in commodities; which Bitcoin is and rather than hedge a thinly traded commodity some people decide to simply eliminate the risk and cash
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I sell physical goods and accept Bitcoin as a payment method. The volatility doesn't bug me at all. While it's only a tiny percentage of overall sales, it's still exciting to see a currency that can actually become a true bartering agent that is freed of non-market forces.
There is but one god, and that god is the market.
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Or the Government .. depending upon your point of view.
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If you wanted to see a currency made up, sell gift certificates for your products. Look, you made a new bartering system without making yourself part of a scam. Playing monopoly is pretty much the same thing as well. Might as well use monopoly money rather than bitcoin, even it has more intrinsic value than bitcoin.
If a seller is concerned with volatility, they should consider not selling their received BTC for fiat currency. It's the number of "we accept bitcoin" sites that accept currency and then immediately convert it to fiat that is one reason for the downward pressure.
And what does that tell you about BitCoin? What should you take away from this? Since you clearly don't get it I'll answer for you ... NO ONE TRUSTS THE SCAM.
I blogged about it the other day, in how I wish governments would just make BTC to fiat currency transactions illegal [2abd.com]. It would be a great step in reducing volatility and decoupling BTC from the regulated markets.
So if no one can exchange real m
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That would make bitcoins worthless overnight.
Stores would simply stop accepting them.
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...sites that accept currency and then immediately convert it to fiat that is one reason for the downward pressure.
I blogged about it the other day, in how I wish governments would just make BTC to fiat currency transactions illegal. It would be a great step in reducing volatility and decoupling BTC from the regulated markets.
- you really don't want that, you think you want it, but you don't.
Having people on both sides of a transaction is important, imagine if there was nobody to sell bitcoins on exchanges, and so the volumes would thin out completely and you would have just a few thousands or (hundreds) trades a day.
So the bid and ask would be pushed higher and higher and higher, however the moment anybody appeared with a non-trivial amount of bitcoins, prices would crash.
Why would you want intraday variations in other curren
Addicted (Score:2)
to bitcoin?
There is still need for a decentralised exchange (Score:4, Interesting)
With the very recent forceful closing of the BitFloor BitCoin exchange, and the inavailability of bitcoin-24, another (european) exchange, there seems to be a crackdown on BitC exchanges going on.
What is needed, is a decentralised method for trading BitCs for other currencies, or else BitCoins can be made to be worthless by shutting down the current centralised, easily identified exchanges. I'd suggest Ripple but that technical solution seems to be going nowhere at the moment, alas.
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Ahhh Yes.. Without an exchange willing to convert my bitcoin to some other currency, there are few retailers who will be accepting payment in bitcoin for much of anything. Once folks realize that bitcoin cannot be easily converted, they will become valueless.
Of course, they have huge value to those who engage in illegal trading exactly because there is no government backing, but is that the kind of thing I want to be indirectly involved in?
I wonder if this is an effort to shut down the currency or is it
Shhh! (Score:5, Insightful)
Silk Road's creator, who calls himself the Dread Pirate Roberts, broke his usual media silence
Yegads, man! You're going to scare the horses. Your usual media silence is a wise practice. The general public doesn't know you exist, and doesn't know you use Bitcoins. Those are good things. The first rule of drug dealing is you do not talk about drug dealing. Just 'cuz I don't use your service doesn't mean I want to see more scrutiny aimed at you, or at Bitcoin.
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If your only goal is short-term profit from illegal activities, that's true. If you want long-term legitimacy, you must engage in politicking. Ultimately, the practice of governments telling citizens what they may do with their bodies is an evil one which must be combated.
Re:Shhh! (Score:4, Insightful)
The problem is that many drugs cause you to lose the capacity for rational thought while intoxicated and directly cause you to do things that you would probably never do sober.
If the bar is the capacity for rational thought, then many people would not be permitted to roam free.
Additionally drugs cost money.
Their high price is a result of their legal status.
Drug addicts generally have a difficult time finding employment thanks to drug screens. Tobacco users are starting to feel this pinch as well yet tobacco is totally legal so no blaming the government here
Those two things are totally different, and pushed on companies for different reasons.
A viable solution might be to legalize drugs and severely increase penalties for drug-related crimes and domestic violence.
A thousand times no. There is no need for different laws for violence committed under the influence and violence committed while sober and only under the influence of whatever chemicals your brain is making that day, just as there is no need for a law against driving like an asshole when you're using your cellphone when there's already a law against driving like an asshole.
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The problem is that alcohol causes you to lose the capacity for rational thought while intoxicated and directly cause you to do things that you would probably never do sober. Things like rape and murder people. Additionally alcohol costs money. Alcoholics generally have a difficult time finding employment thanks to showing up drunk to work.
There is a great explanation. (Score:5, Interesting)
There is no obvious explanation for why the digital currency has fallen so far and so fast, although the market correcting after such a huge rise might be a good explanation.
The price of bitcoin rose much higher than the cost to mine bitcoins (i.e. price of computers and electricity). While some people got caught up in speculating, others saw this and started mining and selling instead, causing a crash. Bitcoins are volatile because people don't understand it yet. If they did, they'd realize that the value can not go far above the price of mining. Having said that, the price of mining is continually going up.
Once a few websites start publishing indices of the average cost of mining a bitcoin at any given time, I think that will keep this sort of speculation in check.
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A corollary to this point being that growing the bitcoin economy currency reserves requires and encourages wasting/destroying a nearly equal value of energy to create. If there are a billion dollars of bitcoin in circulation, that means a billion dollars of coal was burned to create those magic numbers. Bitcoin maintains its scarcity and value in the economically most inefficient possible manner: by requiring the destruction of an equal value of goods --- and specifically a kind of goods associated with som
Paper. Gold. All the same. (Score:2)
They are little more than promissary notes. Units of Debt/Value that can be traded. The "value" of either can be destroyed in a day, and restored as quickly.
It may be that "money" as an arbitrary store of value has reached it's useful limit in a technological society. As self-replicating memes go, it has certainly gone from providing symbiotic utility to becoming a pathological agent on more than one occasion.
Current society, however, is built around it. Replacing it means a new social order - probably one
Completely overblown (Score:5, Insightful)
Re: In the other corner ... (Score:2, Interesting)
Uhh. There were a flaming ton of bank crashes during that time, and still more until the dollar was decoupled from metal prices.
The Age of Gold was no golden age, financially speaking. It also gave too much financial sway to gold producers (mine owners) who could control the rate of production and have disproportionate power over financial markets because of this.
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Hit up tordir and search for it:
dppmfxaacucguzpc.onion
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Go read about the stock market just before the great depression. What you are seeing is the market makers doing "pump and dump" just like stocks In the 1920's. It was common to see large investors buy up some stock, start talking about how it was heading up (and having recent history to show) then as the small investor piled on, slowly sell their shares at huge profit. Once the big guys where all out, they'd start the cycle again on another stock and leave the small fish to take the risks. Eventually, th