Bitcoin Will Probably Never Be Embraced by the U.S. Government
forbes.com
forbes.com
> Barzilay: Do you believe Bitcoin will ever be embraced by the U.S. government?
> Dr. Hosp: I think that the concept of virtual currencies will definitely be embraced, because they have a very transparent transaction ledger. So, we know exactly what’s been happening. With bank transfers, it’s quite hard, but with fiat money it’s impossible, so I think virtual currencies will see a huge uprise by governments. Whether governments will embrace Bitcoin - let’s see, but there is definitely value for people. Bitcoin is very difficult to hack, it’s almost impossible to steal if you use for example multi-signature bolt. And with TenX you can spend Bitcoin pretty much anywhere. So, this is the future to go. I don’t think that Bitcoin is going to be a currency, but it’s going to have status like gold.
Why would the U.S. government tolerate universal currency when it has something far more advantageous? A currency it controls every other currency is pegged to (including Bitcoin).
More practically speaking, the government needs the ability to expand the money supply during financial crises. Bitcoin doesn't lend itself to any of those Keynesian tricks.
And, government is not "afraid" of Bitcoin. Letting the experiment continue is more about laissez-faire capitalism than an inability to regulate crypto.
Government does not need to have its own currency for exist or to do its job.
It's debatable that government having the ability to mess with monetary policy is a good thing. It may be working in US at the moment (and it will be hard to measure if it is helping or not), but there have been a lot of countries economically ruined because of that.
Please provide evidence for this. It seems like most successful governments disagree.
Their share in the bank was was determined in 1998 on the basis of the states' population and GDP, and adjusted since.
Please by all means do me a favor and educate me on the amount of control a country like Slovenia exerts on ECB monetary policy with its 0.3% capital allocation?
Countries use the Euro because it's useful for them to use the Euro, if it's stops being useful they drop it.
Extremely debatable, given the fact that every nation on planet earth basically uses monetary policy.
A rational policy whereby currency is exchanged for other assets at a rate using benchmarks is preferable to a strict currency.
A better economic policy might even allow almost anyone to exchange assets for currency. Then the market can decide how much is in circulation (though arguably that is already happening, just the levers are in the hands of a body, not a distributed group).
Not really true, if you consider all the countries that use the currency of an other. (https://en.wikipedia.org/wiki/Currency_substitution)
Saying every country does it is not a good point, as it could be applied to slavery once upon a time.
But I agree that it's debatable if it is good. Being good and necessary are two different things though.
A) Monetary policy is not 'Keynesian' - and it's a handy thing, which is why everyone does it, and nobody has a perfectly hard currency.
B) BTC is not a currency, it's perfect rigidity - ironically - is what attracted many speculators in the first place, killing it's usefulness as a currency.
The interview with the ex kite surfer and trauma surgeon is his opinions based on his ICO
Some people were flabbergasted when the Fed was buying Mortgage-Backed Securities off the open market, practically giving one group of people money, under the guise of stimulating AN economy.
Different people are going to be flabbergasted when the Fed, under a different group's leadership, starts buying cryptocurrencies by the $ billions every month, practically giving another group of people money, under the guise of stimulating AN economy.
And it will still be unaccountable to anyone that cares.
The European Central Bank buys junk corporate bonds simply because a Goldman Sachs alumni wanted to. The Swiss National Bank buys equity, straight off the New York Stock Exchange, at valuations it can never make a profit from dividends from. The Central Bank of Japan buys equity and bonds.
These institutions are funded by the future productivity of tax payers and can be exposed to heavy losses.
It isn't out of the question that they will buy the spot market in crypto commodities in the future just because someone familiar with that market is heading the bank.
It wasn't under the guise of anything but saving the US economy from a wicked meltdown of epic proportions.
The dominos were set to all go down, the Fed kept a few of them up by rebalancing wealth.
As you point out - viciously unfair - but better in the long run.
FYI - a 'strict currency' is perhaps worse; crisis will happen. Strict currencies ties our boat to the dock, too much or too little water and we're all smoked. Moreover - outside of crises, the economy is dynamic - growing and shrinking, monetary policy helps manage that.
A strict currency is better than a poorly managed currency, but a well managed currency is better than a strict currency.
That's your opinion, not fact. Banks are larger than ever. Inequality higher than ever. Housing more expensive than ever. The world is more unstable now than it was in 2008. Your definition of "better in the long run" is quite odd.
The economy is very intertwined, with the banks at the centre.
If they start to go down - everything starts to do down.
It's as factual as saying if you choke and engine of oxygen, that it will stop burning.
It's simple cause and effect.
Yes - we understand very well the long-long term moral dilemma of 'too big to fail' - this is a well known issue.
And as I mentioned it was 'viciously unfair' - by the way - when the Fed absorbed those mortgages, they were saving millions of American homeowners as well.
A 'market correction' would have implied massive foreclosure across the US.
The 'winners' of the bailout were Banks AND those who owned homes. ALL American home values were propped up.
the 'losers' of the action were non-property owners.
'The more debt' people were carrying, specifically, 'mortgage debt' - the 'more free money' got from the Feds actions.
The fact that you think the impacts of the financial crisis are behind us is hilarious. Just wait till the municipal debt starts to crumble. Places like Chicago and Puerto Rico have only been able to sustain themselves because of the low interest rates on debt. The actions of the Fed didn't fix anything, they just kicked the can down the road.
ctrl-w
You could argue this was essentially the role of gold but the main problem with gold is that its the central banks that started with biggest ownership of gold so its very susceptible to price manipulation and really un-auditable without some form of trust setup. both of those are not as much of concern with cryptocurrencies.
TLDR: it will be an asset until it becomes a global currency.
Virtual currencies that are not anonymized - no problem. But not Bitcoin.
It's not a threat to anything but speculators bank accounts.
Nobody is using BTC as a currency.
- bitcoin isn't usable as a transactional currency. it costs $30-40 per transaction. Plus other currencies are gaining steam, and offering other choices for people to transact
- bitcoin isn't rare to be a store of value.....everyday there's a new viable cryptocurrency springing up
- bitcoin isn't safer than dollar.....it can drop 90% in any day; no official entity is going to prop it up and make sure it doesn't crash. it can be banned by countries (and has been by a few)
- bitcoin isn't easy than square cash or wires.....it can take several weeks to send money. plus the transaction fees are high