Senate Bill 21, Establishing the Texas Bitcoin Reserve
ltgov.texas.gov
ltgov.texas.gov
If cryptocurrency is the answer, then the government should start a new 'coin', and start from there. There is no reason why wealth should be transferred by fiat to holders who were either speculators or engaging in criminal activity (as their are limited other values for cryptocurrency at the moment).
https://www.reuters.com/world/us/trumps-new-crypto-coin-spar... https://www.dlnews.com/articles/people-culture/inside-the-tr...
What Trump promised about the central bank is that he would prevent the formation of a central bank digital currency. His audience dislikes the CBDC because it has different rules for what’s tolerable. The most important innovation for those people is that crypto apparently tolerates everything.
“I don’t believe we shall ever have a good money again before we take the thing out of the hands of government, that is, we can’t take it violently out of the hands of government, all we can do is by some sly roundabout way introduce something that they can’t stop.” – F.A. Hayek 1984
1. Initially, the currency is promised to be convertible to a basket of goods and services. That promise begins the reputation of the issuing institution.
2. Fraud would still be illegal, reputation-damaging, and not “it’s called being smart”
Point 1 isn't true. There doesn't need to be a issuing institution. Just look at gold.
As for 2., yes, it seems that the promises from centralised institutions you mention always end up being fraudulent
Now imagine that bearer is a politician who blames the North Korea for the missing assets.
Or imagine that key is damaged and no one can get the coins. It is lost forever.
I almost hope this stupid experiment is done on a state level, rather than national, and that it fails miserably as cautionary tale.
The average bitcoiner pleb with a single air-gapped signing device has better security.
It was a rookie error, helped by the overly complex nature of Ethereum.
K.I.S.S., especially when it comes to money.
Tick tock, next block...
“All fiat currency eventually goes to its natural worth, which is the paper it’s printed on,” Schwertner said at the February 18 hearing. “We can buy land. We can buy gold. I think Texas should have the option of evaluating the best-performing asset [Bitcoin] of the last 10 years.”
States don’t buy investments for day to day use. Your point is valid but irrelevant to SB21.
What happens to the value of each dollar, if we double the number of dollars?
What if I told you they do that every decade?
What if I told you that real estate hasn't gone up in value over the last 50 years....only its price?
The supply of bitcoin is hard capped and most of it has already been issued. Think of it as the perfect long-term savings tool for now.
I see PoW systems as mechanisms to quantify human technological development and mastery over energy. As access to energy & computing increases, the implicit value of crypto increases in kind. It is a crystallization of energy into value, and a rather "pure" one at that.
As people sit here and talk, debate, buy into propaganda by dying platforms, this value crystallization marches on. It cannot be stopped. Because of the limited supply, it motivates people who see and understand these facts to buy in, but even when "easy" access to the crystallization ceases, it still promotes 2nd tier energy to value capture via transaction fees, which also scale with energy & computation.
People get confused and think it is imaginary money. Managing the logistics of server farms, optimizing access to cheap energy sources, and developing increasingly powerful / efficient circuits is far from imaginary. This and much more is required to compete in today's crypto mining. The crypto itself is representative of countless modern industries working in harmony, all in cutting edge industries that push humanity further.
The criticisms are largely thoughtless and nonsensical. The energy is agnostic of the production; you can mine bitcoin with coal power, but you can also mine it with solar and nuclear. You can even mine it with a dyson sphere. It doesn't matter.
It isn't wasted energy, insomuch as massive office buildings in the center of every city dedicated to an inefficient banking system is a waste of money, or countless lives lost over wars and access to resources is a waste of money.
Anyway I could write all day about this, but I believe what I am saying strikes closer to the heart of what you were bringing up.
You're correct, money is potential energy. A higher abstraction of energy than the physical energy we're used to, but potential energy nonetheless. Proof-of-work means that everyone must put in work of equal value to create bitcoin - the energy they put in to obtain it is stored within it - and this applies to everyone, whereas fiat allows bankers and people close to them to put in almost no work to obtain vast amounts of energy, simply because they have tricked the world into giving them a monopoly on creating it - fractional reserve is fundamentally a trick, a fraud. The more they can lend out (creating wars generates great demand for debt I hear), the faster the flow of free money into their bulging, overflowing pockets. I wonder how much they really have after centuries of this trickery? I heard someone posit that they have 93% of all the money while the rest of the world is fighting over the last 7%. That doesn't sound unrealistic to me.
Regarding bitcoin, I agree that the method of issuance (proof of work, like gold) is more important than the rate of issuance. But the rate of issuance is still extremely important - if bitcoin didn't have a capped supply, then it would be superseded by another form of itself that did, that would be a superior store of value (bitcoin's key use case currently). It's this that provides an enormous incentive for people to risk their wealth and adopt it in its current early stage and will ultimately go on to fuel it's amazing victory over the monstrously powerful and corrupt fiat system.
A creation that can do this would surely be one of the most important in the history of mankind.
But just as easily, a network of people can agree with different rules, and that's why I don't think it's so important. As long as the rules are transparent and well defined, that transparency itself is the revolutionary improvement.
Show me the incentives and I'll show you the outcome.
The capped supply provides a _selfish_ incentive to each individual to hold bitcoin.
Everyone wants to the world to be a better place. More fairness, transparent rules etc - but most aren't willing to put in the effort to make it so. The capped supply forces them to either make it happen or become weaker than those that do. It taps into people's fundamental urges and drives them to make the world a better place by giving them no real choice in the matter. Do or die.
BTW. I prefer to differentiate between bitcoin and crypto.
Bitcoin is one of the most important inventions in mankind's history ultimately going to $∞, while crip-toe is a snake pit of scams/flawed projects all going to $0 in the long term.
Also, describing bitcoin as an asset makes more sense than as a currency. Becoming a viable currency some time in the future would just be the cherry on top of the cake.
Have you ever tried to transfer money, I don't know, ANYWHERE with the legacy banking system? ACH transfers can take days, and you don't have a single clue what is happening with your money between banks -- let alone what your real balance is anywhere until it clears. And there is an upper limit on the amount you can transfer.
If you want "instant" transfers, you get to pay a paltry fee of a PERCENTAGE OF YOUR TRANSFER if using debit. For wire transfers, you only have to fill out a massive transfer sheet with a ridiculous number of values that you absolutely cannot get wrong, and after you slog through that mess you get to pay a small fee of over $25.00 to make a transfer -- assuming your bank allows it after you ask pretty please to move your money.
That is just with money movement.
With Bitcoin? I get an address, I paste it, I double check, I click transfer. Boom, done. I get to see exactly where it is in the transfer process, exactly what is happening, and I can send ANY AMOUNT for the same tiny fees. That is on the mainnet. If using lightning, those fees largely vanish and the transfer becomes instantaneous.
Just the FUNCTIONAL experience is absolutely leagues ahead of the legacy banking system, without even talking about minting, auditing, fraud, etc. it really isn't even close to the systems before it.
Places like Brazil have much better experiences. The PIX transfer system resembles the crypto experience, but more ironed out, instant, and free. It makes the legacy banking system much more tolerable, but it still suffers from the other reasons crypto is better; like international remittances, and sovereignty of wealth.
We should not have to ask an authority permission to move value we have ownership of.
The Federal strategic Bitcoin reserve is supposedly formed from FBI seizures. It might be touchable by the judicial branch (returned to a person) and there’s no guarantee how much more the FBI will add.
These are different kinds of money. People who want more of the first kind are usually elected and must face voters about the wisdom of taxation. People who want more of the second don’t set any tax rates and directly benefit when more crimes are caught, however those crimes manifest.