Cryptocurrencies and the economy

Belz... said:
Well I don't know much about the technical aspects of blockchain. Could you expand on that?
Click to expand...

I think he's suggesting someone could function like a bank does. They could own all the actual bitcoin and create something akin to an on demand deposit where they would deliver some to whoever you choose whenever you choose.

If this person receiving the bitcoin was also a customer of the same "bank" the whole thing could be done as an instantaneous paper transaction where no actual bitcoin changes hands. If it were a different "bank" they could keep a ledge of how much the two banks owe each other and settle up at the end of the day or just treat the difference as a loan and charge the other bank interest.

This would more or less mimic how the current system works, but it begs the question "why adopt this new currency if fixing the problems with it means finding ways to mimic the system we already have"
 
lomiller said:
Crypto-currencies don't allow for the type of tools central banks use to accomplish this. In fact bitcoin was specifically created to prevent central banks from doing this, essentially following libertarian\anarchist principles that central banking puts too much power in government hands.
Click to expand...

One of the ironies with BTC in particular is that there's increasing evidence that the Big Whales involved in stockpiling are governments, who have the resources to mine and hack at scale.

It may end up being a currency influenced by governments; but unlike one's national currency, it is beyond democratic influence of the users.
 
Last edited:
lomiller said:
I think he's suggesting someone could function like a bank does. They could own all the actual bitcoin and create something akin to an on demand deposit where they would deliver some to whoever you choose whenever you choose.

If this person receiving the bitcoin was also a customer of the same "bank" the whole thing could be done as an instantaneous paper transaction where no actual bitcoin changes hands. If it were a different "bank" they could keep a ledge of how much the two banks owe each other and settle up at the end of the day or just treat the difference as a loan and charge the other bank interest.

This would more or less mimic how the current system works, but it begs the question "why adopt this new currency if fixing the problems with it means finding ways to mimic the system we already have"
Click to expand...
That is the worst made-up theory ever. :eek:
 
Belz... said:
Well I don't know much about the technical aspects of blockchain. Could you expand on that?
Click to expand...
You can have full clients (bitcoin wallet software) that store the blockchain on your computer or lightweight clients that rely on nodes for blockchain information. You can even have online wallets if you trust your server enough.

If everybody could only run full clients then you would not be able to use a mobile phone to transact in bitcoin.

https://en.wikipedia.org/wiki/Bitcoin#Wallets
 
Query:
Let us imagine I have a bitcoin from 2012 and wish to sell a satoshi, which might be worth a dime.
Does this use the same energy as selling the whole bitcoin?
This question has a general solution I am sure.
 
Puppycow said:
I realize that there's already a thread about bitcoin, but I wanted to discuss the whole crypto thing on a more meta level, including how they affect the economy more generally.

It does seem weird to me, how volatile they are. I admit, I don't really understand why people think they have value. Bitcoin is over $60,000 now. Ethereum over $2,000.
Click to expand...

Think harder. Evading capital controls is the number one virtue of crypto currencies. You're a Chinese businessman, and you want to escape. You sell your business for bitcoin, and then you proceed to create a "brain wallet" that consists of a pass phrase that represents a bitcoin keypair. You walk through the airport with the shirt on your back unmolested by government goons and thugs, arrive at your new destination, use your passphrase to recover your keypair, and then enjoy your new life in a free country.

Seems pretty valuable to me.
 
Tippit said:
Think harder. Evading capital controls is the number one virtue of crypto currencies. You're a Chinese businessman, and you want to escape. You sell your business for bitcoin, and then you proceed to create a "brain wallet" that consists of a pass phrase that represents a bitcoin keypair. You walk through the airport with the shirt on your back unmolested by government goons and thugs, arrive at your new destination, use your passphrase to recover your keypair, and then enjoy your new life in a free country.

Seems pretty valuable to me.
Click to expand...

Seems to me that transferring large sums of ordinary currency into crypto would be a large "look at me" sign for any regulatory or oppressive state agency. There's nothing about crypto that makes moving large sums of money clandestine.

Selling off a business and cashing out into crypto seems like a great way to get detained while trying to exit the country.
 
lomiller said:
Nice blog post on the subject

https://drewdevault.com/2021/04/26/Cryptocurrency-is-a-disaster.html

It's got a nice point I hadn't previously considered. Crypto is effectively rendering some service models impossible to provide. Not included here, but it potentially could even make it impossible for apartments to offer "free" utilities because that can easily become cheep electricity of crypto mining.
Click to expand...

This source claims a large portion of bitcoin mining IP's trace back to colleges and universities. Most college dorm costs include electricity, so the university eats the energy costs.

https://www.marketwatch.com/story/college-students-are-secretly-mining-bitcoin-in-their-dorms-on-room-check-days-i-have-to-put-a-blanket-over-it-2018-03-29

A kid I knew from when I was still in college got a minor ass-chewing because it was discovered he was setting one of our cloud-computing labs to mine bitcoin overnight while idle. This was back when bitcoin was still largely worthless, but it seems trying to foist off the resource costs of mining has been around since the early days.

ETA: Thinking back, I remember that the guy was actually involved in environmental activism stuff at my college. Big proponent of biking vs cars, etc. Wonder how he feels about the environmental impact of crypto these days.
 
Last edited:
The flip side to whining about the electricity that is consumed by crypto mining, is to consider the deleterious economic effects on savers and the working poor that are the direct result of the debasement of fiat currencies all around the world.

Central banks prop up the financial assets of the rich by conjuring never-ending sums of money to bid up said assets, at the direct expense of people who save such currencies, or exchange their labor for them. Perhaps if central banks didn't use fiat currencies to exploit the poor, there wouldn't be such demand for crypto in the first place.
 
Tippit said:
The flip side to whining about the electricity that is consumed by crypto mining, is to consider the deleterious economic effects on savers and the working poor that are the direct result of the debasement of fiat currencies all around the world.

Central banks prop up the financial assets of the rich by conjuring never-ending sums of money to bid up said assets, at the direct expense of people who save such currencies, or exchange their labor for them.
Click to expand...

You don't actually know how any of this works, do you?
 
Belz... said:
You don't actually know how any of this works, do you?
Click to expand...


Well, no, you got me. Financial asset inflation and financial repression are such complex topics. What was I thinking! Why don’t you explain to me how everything works, when you’re not working your day job?


Sent from my iPhone using Tapatalk
 
Puppycow said:
Bitcoin Blackouts: Russian Cryptocurrency 'Miners' Minting Millions While Sucking Abkhazia's Electricity Grid Dry
Click to expand...


Nice date on that article. BTC has since more than doubled. If anything, this puts into perspective how corrupt monetary systems around the world are, and just how much demand there is for honest money (or honest assets with monetary properties if you wish).

Central bankers can’t counterfeit bitcoin, although they can certainly counterfeit their own fiat currencies and buy up bitcoin. That is probably next on the agenda, before naked shorting it into oblivion like they do with gold and silver.

Sent from my iPhone using Tapatalk
 
Last edited:
Charlie Munger praises bitcoin again.

I think this is relevant to cryptos and the economy generally.

Munger on bitcoin'I hate the bitcoin success. And I don't welcome a currency that's so useful to kidnappers and extortionists and so forth . . . So I think I should say modestly that I think the whole development is disgusting and contrary to the interest of civilisation'

https://www.nzherald.co.nz/business...d-hot-us-recovery/74VY4THDKXBUMC5NEV7P4OVQBI/
 
You must log in or register to reply here.

Back
Top Bottom