Bitcoin may be a currency. That is you can use to facilitate the exchange of goods.
It is not money. Money can be used for the exchange of goods (yes), store of value (no), and unit of account (no). In my opinion Bitcoin will never be money.
Bitcoin may be a currency. That is you can use to facilitate the exchange of goods.
Serious question: What makes something a store of value or not? Is it about volatility? Persistence/durability? Something else?
Does not help. During the gold standard nothing stopped governments from issuing 1/1000th of a cent coins. It is not the number of coins/banknotes available that matters, but their total notional value.
BTC is the same as gold standard, but without a backing government and thousands of years of traditional use behind. In a way, it is the purest form of monetary standard, with all of its problems.luckyducky99 wrote: ↑Wed May 05, 2021 3:40 pmSerious question: What makes something a store of value or not? Is it about volatility? Persistence/durability? Something else?
Basically yes. Under the Credit Theory of Money, money is a special type of bond. i.e. dollars. Society owes you value when you redeem the bond. i.e., when you spend the dollars. Now prices will fluctuate - that is o.k. That is called price discover. Inputs, outputs, and preferences will evolve over time. Inflation is o.k. The consensus is that in the US will have low steady inflation over the next 10 years. 2% to 3%. There are economies which had 10% inflation for years and that was accepted. The expectations were built in. I can make a reasonable estimate of how much money I will need in 10 years to buy a chicken in many different currencies.luckyducky99 wrote: ↑Wed May 05, 2021 3:40 pmSerious question: What makes something a store of value or not? Is it about volatility? Persistence/durability? Something else?
agree. i'm hearing that fees to convert dollars to bitcoin are like 0.5% to 1.5% even at institutional scale. so basically one needs to pry bitcoin out of holders hands by giving them 1%- insane!EnjoyIt wrote: ↑Wed May 05, 2021 4:32 pm I have seen some of the people posting on these crypto threads not fully understand what deflation is. They think deflation is having less physical coins. That is not the case. Deflation is that each coin can purchase more and more goods and services. Basically price continuously going up as it has over the last year. Crypto bugs see it as a feature because they are getting rich.
History has shown that economies come to a halt when their currency hit deflation. People hoard money, more importantly businesses do not invest their money since hoarding it becomes profitable. Having a little bit of inflation incentivizes investing and economic growth. Deflation, incentives the exact opposite.
Deflation is a huge problem for cryptocurrencies because people hoard them. I think they call HODL (Hold On for Dear Life.) Which means they can never become a currency. Ignore bitcoin which even the biggest proponents realize can never be a currency. Ethereum for example is seeing the same problem. Why spend my ETH to invest if all it does is make me rich just HODLing? And no, lending your crypto currency so that someone else can buy more cryptocurrency is not the same thing, and BTW is exactly what collapsed the housing market in 2009 and created the financial crisis. Why would I invest my ETH in car companies, tech companies, pharmaceutical companies, agriculture, etc when I can just HODL?
My apologies, I may be mistaken but your comment makes me believe that you don't understand the definition of deflation. Please re-read my post above.
As they say: "It is not a bug, it is a feature." Yes, it is fixed by design. I understand why that choice was made, but in my opinion it was the wrong choice. I think this design flaw will prevent Bitcoin from every becoming money.
Yes, at least some of them. Ideology skews libertarian/dillusioned.steve r wrote: ↑Tue May 04, 2021 9:55 amsenex wrote: ↑Mon May 03, 2021 4:10 pm The arguments I've heard from some of its advocates is that the "deflation problem" isn't actually a problem. People have routinely bought things, even when they expected it to be cheaper next year: computers, phones, etc.
If you want to understand the arguments between mainstream economics (which is pro-debasement) and sound money, try reading some articles about the Austrian school of economics (Mises, etc).Serious question and I am trying to be mindful of BH policy on politics, but is the Crypto currency divide routed in ideology? Is there a group that the current system hurts the way arguably the gold standard hurt farmers?grok87 wrote: ↑Mon May 03, 2021 5:06 pm https://en.wikipedia.org/wiki/Cross_of_Gold_speechwrote: You shall not crucify mankind upon a cross of gold
To my way of thinking, NO. At most an old guard / new way debate, but perhaps I am missing something.
You are onto something, because inflation/deflation depends on the amount of money "normally available to execute transactions" (which in literature you will find as money supply times velocity of money). However, even if BTC holders were not hoarding at all, the BTC finite amount would eventually cause deflation. With that eventuality coming pretty soon, unless the World's GDP growth comes to a standstill.
thanks for your very informative post. re 6) "money can only be spent on certain items", it would be interesting to see how that would work out. seems like it would just generate a black market and a lot of barterPrahasaurus wrote: ↑Fri May 07, 2021 12:32 am I'm not sure if you are asking how Bitcoin will solve its deflationary problem, or how Bitcoin will solve deflation of assets in general.
But as with so many things "crypto" related, we need to stop thinking in terms of Bitcoin and more in terms of digital currencies, crypto currencies, and the technology behind. Because moving from traditional money to digital currencies will add the element of programability. This is such a radical change I don't think most people have fully grasped - or even begun to process - its implications. Certainly its ability to influence inflation and deflation in a more direct manner.
Bitcoin is just one participant in this new paradigm. Not even the most interesting, in my opinion.
What will this brave new world bring?
1 - Central banks and/or governments can issue money directly to citizens/consumers, they are no longer dependent on banks. Your stimulus check can be airdropped into your account immediately. Your account does not need to be with a bank, but can simply be a wallet on your mobile phone.
2 - All transactions will be tracked, monitored, recorded, etc. in real time. Yes, this will be a privacy nightmare when using state supported digital currencies.
3 - Taxes can be deducted at point of transaction, no need to file taxes at year end. Open blockchains are especially interesting here, as they can be programmed in such a way that audits of companies or individuals are no longer necessary, simply audits of the open source software.
4 - More payments will occur automatically using IoT technology, e.g. you walk into your supermarket, pick out your items, leave, and your mobile wallet will pay as you leave. The concept of paying for goods at a "point of sale" will blur.
5 - Programmable money allows central bankers more flexibility on inflation, deflation, etc. It allows political leaders to restrict what can be bought, how much can be bought, when it can be bought, etc. I have no doubt they are salivating over this now, which is why I'm sure we'll see digital currencies sooner rather than later. Especially as guaranteed basic incomes become more and more prevalent in the developed world with the continued rise of AI. Banks are bloated and inefficient. Perhaps required in 1840 when we all worked in fields, but so outdated now.
6 - You will see time based money to encourage spending (use case from programmable money), e.g. you are sent a stimulus check that must be used within 14 days or it will expire. Or money can can only be spent on certain items (e.g. food for the poor receiving government handouts, a moralist's dream, i.e. no more concerns that "food stamps are buying lottery tickets!" since they can now only buy food, etc.)
7 - Payments of any type will no longer need to go through banks. This might include parking fines, electricity bills, tax payments (mailing a check, LOL, it's like 1975!), whatever. Again, banks will be exposed for the blood sucking useless entities they are. Look for capital to earn interest in decentralized applications like Aave.
Banks, CPAs, tax attorneys, company auditors (replaced by software auditors), etc., goodbye. Thanks, but your services are no longer needed.
One benefit of some crypto currencies within this new system is that they can provide autonomy and hence privacy for financial transactions. An alternative payment system outside the eyes of the state. It's also why states will eventually try to ban or at least limit the use of "privacy coins" like Monero and Zcash (my favorite). Crypto will be one of the only ways people in the future will be able interact outside the eyes of our prying governments. Similar to how cash functions today. Cash, I believe, will eventually be outlawed. States lose control when you use cash. My guess is this will happen sooner than later.
It's easy with programmable money to, well, program how it can be used. So let's take future "food stamps," which will really be digital money airdropped to recipients into their designated digital wallets. However, those specific digital dollars would be restricted so it's only allowed to be used on certain items for the first transaction. After that first transaction, restrictions on those digital dollars would be removed. And that first transaction would need to be for food only.grok87 wrote: ↑Fri May 07, 2021 5:17 amthanks for your very informative post. re 6) "money can only be spent on certain items", it would be interesting to see how that would work out. seems like it would just generate a black market and a lot of barterPrahasaurus wrote: ↑Fri May 07, 2021 12:32 am I'm not sure if you are asking how Bitcoin will solve its deflationary problem, or how Bitcoin will solve deflation of assets in general.
But as with so many things "crypto" related, we need to stop thinking in terms of Bitcoin and more in terms of digital currencies, crypto currencies, and the technology behind. Because moving from traditional money to digital currencies will add the element of programability. This is such a radical change I don't think most people have fully grasped - or even begun to process - its implications. Certainly its ability to influence inflation and deflation in a more direct manner.
Bitcoin is just one participant in this new paradigm. Not even the most interesting, in my opinion.
What will this brave new world bring?
1 - Central banks and/or governments can issue money directly to citizens/consumers, they are no longer dependent on banks. Your stimulus check can be airdropped into your account immediately. Your account does not need to be with a bank, but can simply be a wallet on your mobile phone.
2 - All transactions will be tracked, monitored, recorded, etc. in real time. Yes, this will be a privacy nightmare when using state supported digital currencies.
3 - Taxes can be deducted at point of transaction, no need to file taxes at year end. Open blockchains are especially interesting here, as they can be programmed in such a way that audits of companies or individuals are no longer necessary, simply audits of the open source software.
4 - More payments will occur automatically using IoT technology, e.g. you walk into your supermarket, pick out your items, leave, and your mobile wallet will pay as you leave. The concept of paying for goods at a "point of sale" will blur.
5 - Programmable money allows central bankers more flexibility on inflation, deflation, etc. It allows political leaders to restrict what can be bought, how much can be bought, when it can be bought, etc. I have no doubt they are salivating over this now, which is why I'm sure we'll see digital currencies sooner rather than later. Especially as guaranteed basic incomes become more and more prevalent in the developed world with the continued rise of AI. Banks are bloated and inefficient. Perhaps required in 1840 when we all worked in fields, but so outdated now.
6 - You will see time based money to encourage spending (use case from programmable money), e.g. you are sent a stimulus check that must be used within 14 days or it will expire. Or money can can only be spent on certain items (e.g. food for the poor receiving government handouts, a moralist's dream, i.e. no more concerns that "food stamps are buying lottery tickets!" since they can now only buy food, etc.)
7 - Payments of any type will no longer need to go through banks. This might include parking fines, electricity bills, tax payments (mailing a check, LOL, it's like 1975!), whatever. Again, banks will be exposed for the blood sucking useless entities they are. Look for capital to earn interest in decentralized applications like Aave.
Banks, CPAs, tax attorneys, company auditors (replaced by software auditors), etc., goodbye. Thanks, but your services are no longer needed.
One benefit of some crypto currencies within this new system is that they can provide autonomy and hence privacy for financial transactions. An alternative payment system outside the eyes of the state. It's also why states will eventually try to ban or at least limit the use of "privacy coins" like Monero and Zcash (my favorite). Crypto will be one of the only ways people in the future will be able interact outside the eyes of our prying governments. Similar to how cash functions today. Cash, I believe, will eventually be outlawed. States lose control when you use cash. My guess is this will happen sooner than later.
cheers,
grok
Prahasaurus wrote: ↑Fri May 07, 2021 12:32 am I'm not sure if you are asking how Bitcoin will solve its deflationary problem, or how Bitcoin will solve deflation of assets in general.
But as with so many things "crypto" related, we need to stop thinking in terms of Bitcoin and more in terms of digital currencies, crypto currencies, and the technology behind. Because moving from traditional money to digital currencies will add the element of programability. This is such a radical change I don't think most people have fully grasped - or even begun to process - its implications. Certainly its ability to influence inflation and deflation in a more direct manner.
Bitcoin is just one participant in this new paradigm. Not even the most interesting, in my opinion.
What will this brave new world bring?
1 - Central banks and/or governments can issue money directly to citizens/consumers, they are no longer dependent on banks. Your stimulus check can be airdropped into your account immediately. Your account does not need to be with a bank, but can simply be a wallet on your mobile phone.
2 - All transactions will be tracked, monitored, recorded, etc. in real time. Yes, this will be a privacy nightmare when using state supported digital currencies.
3 - Taxes can be deducted at point of transaction, no need to file taxes at year end. Open blockchains are especially interesting here, as they can be programmed in such a way that audits of companies or individuals are no longer necessary, simply audits of the open source software.
4 - More payments will occur automatically using IoT technology, e.g. you walk into your supermarket, pick out your items, leave, and your mobile wallet will pay as you leave. The concept of paying for goods at a "point of sale" will blur.
5 - Programmable money allows central bankers more flexibility on inflation, deflation, etc. It allows political leaders to restrict what can be bought, how much can be bought, when it can be bought, etc. I have no doubt they are salivating over this now, which is why I'm sure we'll see digital currencies sooner rather than later. Especially as guaranteed basic incomes become more and more prevalent in the developed world with the continued rise of AI. Banks are bloated and inefficient. Perhaps required in 1840 when we all worked in fields, but so outdated now.
6 - You will see time based money to encourage spending (use case from programmable money), e.g. you are sent a stimulus check that must be used within 14 days or it will expire. Or money can can only be spent on certain items (e.g. food for the poor receiving government handouts, a moralist's dream, i.e. no more concerns that "food stamps are buying lottery tickets!" since they can now only buy food, etc.)
7 - Payments of any type will no longer need to go through banks. This might include parking fines, electricity bills, tax payments (mailing a check, LOL, it's like 1975!), whatever. Again, banks will be exposed for the blood sucking useless entities they are. Look for capital to earn interest in decentralized applications like Aave.
Banks, CPAs, tax attorneys, company auditors (replaced by software auditors), etc., goodbye. Thanks, but your services are no longer needed.
One benefit of some crypto currencies within this new system is that they can provide autonomy and hence privacy for financial transactions. An alternative payment system outside the eyes of the state. It's also why states will eventually try to ban or at least limit the use of "privacy coins" like Monero and Zcash (my favorite). Crypto will be one of the only ways people in the future will be able interact outside the eyes of our prying governments. Similar to how cash functions today. Cash, I believe, will eventually be outlawed. States lose control when you use cash. My guess is this will happen sooner than later.
I hold this view and referenced it above. Check out the history of gold and inflation / deflation during the 19th century. This was a long period of increased productivity, growing GNP, and a move from a barter economy to a monetized one. You can track economic growth, deflation, and its associated evils. Then a gold strike would happen someplace in the world and there would be inflation.Thesaints wrote: ↑Thu May 06, 2021 8:12 pm You are onto something, because inflation/deflation depends on the amount of money "normally available to execute transactions" (which in literature you will find as money supply times velocity of money). However, even if BTC holders were not hoarding at all, the BTC finite amount would eventually cause deflation. With that eventuality coming pretty soon, unless the World's GDP growth comes to a standstill.
No, actually. I don't see it at all. Everything that you have just so eloquently said completely affirms that a shift to cryptocurrencies will lead to totalitarianism.Prahasaurus wrote: ↑Fri May 07, 2021 6:09 am You quickly see why blockchain solutions offer one of the only ways in the future to prevent totalitarian governments from monitoring how we spend our money, even dictating how we spend our money.
To the extent there are totalitarian regimes, they are more likely to outlaw transactions that they can't monitor. Then if you are using these technologies you are breaking the law and putting oneself at risk.Beensabu wrote: ↑Fri May 07, 2021 6:20 pmNo, actually. I don't see it at all. Everything that you have just so eloquently said completely affirms that a shift to cryptocurrencies will lead to totalitarianism.Prahasaurus wrote: ↑Fri May 07, 2021 6:09 am You quickly see why blockchain solutions offer one of the only ways in the future to prevent totalitarian governments from monitoring how we spend our money, even dictating how we spend our money.
Agree 100%. I would see eventual government regulation, intervention or even outlawing of cryptocurrencies the biggest threat. It seems like Dalios fairly objective take said the same thingalex_686 wrote: ↑Fri May 07, 2021 1:47 pmI hold this view and referenced it above. Check out the history of gold and inflation / deflation during the 19th century. This was a long period of increased productivity, growing GNP, and a move from a barter economy to a monetized one. You can track economic growth, deflation, and its associated evils. Then a gold strike would happen someplace in the world and there would be inflation.Thesaints wrote: ↑Thu May 06, 2021 8:12 pm You are onto something, because inflation/deflation depends on the amount of money "normally available to execute transactions" (which in literature you will find as money supply times velocity of money). However, even if BTC holders were not hoarding at all, the BTC finite amount would eventually cause deflation. With that eventuality coming pretty soon, unless the World's GDP growth comes to a standstill.
This is fascinating stuff. There are a lot of "ifs" involved, but an interesting vision.Prahasaurus wrote: ↑Fri May 07, 2021 6:09 amIt's easy with programmable money to, well, program how it can be used. So let's take future "food stamps," which will really be digital money airdropped to recipients into their designated digital wallets. However, those specific digital dollars would be restricted so it's only allowed to be used on certain items for the first transaction. After that first transaction, restrictions on those digital dollars would be removed. And that first transaction would need to be for food only.grok87 wrote: ↑Fri May 07, 2021 5:17 amthanks for your very informative post. re 6) "money can only be spent on certain items", it would be interesting to see how that would work out. seems like it would just generate a black market and a lot of barterPrahasaurus wrote: ↑Fri May 07, 2021 12:32 am I'm not sure if you are asking how Bitcoin will solve its deflationary problem, or how Bitcoin will solve deflation of assets in general.
But as with so many things "crypto" related, we need to stop thinking in terms of Bitcoin and more in terms of digital currencies, crypto currencies, and the technology behind. Because moving from traditional money to digital currencies will add the element of programability. This is such a radical change I don't think most people have fully grasped - or even begun to process - its implications. Certainly its ability to influence inflation and deflation in a more direct manner.
Bitcoin is just one participant in this new paradigm. Not even the most interesting, in my opinion.
What will this brave new world bring?
1 - Central banks and/or governments can issue money directly to citizens/consumers, they are no longer dependent on banks. Your stimulus check can be airdropped into your account immediately. Your account does not need to be with a bank, but can simply be a wallet on your mobile phone.
2 - All transactions will be tracked, monitored, recorded, etc. in real time. Yes, this will be a privacy nightmare when using state supported digital currencies.
3 - Taxes can be deducted at point of transaction, no need to file taxes at year end. Open blockchains are especially interesting here, as they can be programmed in such a way that audits of companies or individuals are no longer necessary, simply audits of the open source software.
4 - More payments will occur automatically using IoT technology, e.g. you walk into your supermarket, pick out your items, leave, and your mobile wallet will pay as you leave. The concept of paying for goods at a "point of sale" will blur.
5 - Programmable money allows central bankers more flexibility on inflation, deflation, etc. It allows political leaders to restrict what can be bought, how much can be bought, when it can be bought, etc. I have no doubt they are salivating over this now, which is why I'm sure we'll see digital currencies sooner rather than later. Especially as guaranteed basic incomes become more and more prevalent in the developed world with the continued rise of AI. Banks are bloated and inefficient. Perhaps required in 1840 when we all worked in fields, but so outdated now.
6 - You will see time based money to encourage spending (use case from programmable money), e.g. you are sent a stimulus check that must be used within 14 days or it will expire. Or money can can only be spent on certain items (e.g. food for the poor receiving government handouts, a moralist's dream, i.e. no more concerns that "food stamps are buying lottery tickets!" since they can now only buy food, etc.)
7 - Payments of any type will no longer need to go through banks. This might include parking fines, electricity bills, tax payments (mailing a check, LOL, it's like 1975!), whatever. Again, banks will be exposed for the blood sucking useless entities they are. Look for capital to earn interest in decentralized applications like Aave.
Banks, CPAs, tax attorneys, company auditors (replaced by software auditors), etc., goodbye. Thanks, but your services are no longer needed.
One benefit of some crypto currencies within this new system is that they can provide autonomy and hence privacy for financial transactions. An alternative payment system outside the eyes of the state. It's also why states will eventually try to ban or at least limit the use of "privacy coins" like Monero and Zcash (my favorite). Crypto will be one of the only ways people in the future will be able interact outside the eyes of our prying governments. Similar to how cash functions today. Cash, I believe, will eventually be outlawed. States lose control when you use cash. My guess is this will happen sooner than later.
cheers,
grok
A black market would be illegal and carry huge fines. As cash would be outlawed, it would be easy to monitor how food stamp recipients spend their digital dollars.
It's no surprise China is most enthusiastic about digital currencies. But I have no doubt American officials love it too. We've seen from the Snowden leaks that our government wants to know what we are all doing always. Of course to prevent terrorism (cough cough).
You quickly see why blockchain solutions offer one of the only ways in the future to prevent totalitarian governments from monitoring how we spend our money, even dictating how we spend our money. But again, it will be implemented in the name of security, convenience, etc. This is why I do think governments will go after crypto in some forms. It will start with privacy coins like Monero and Zcash. That censorship will then be extended to other projects.
As citizens of democracies, we can push back against this. They can't implement it without our consent, at least in the beginning. But education is the key. It's no surprise they want to paint crypto as only being used by criminals and terrorists. It's how they will build public support.
Exactly. If there is a shift, and Prahasaurus has done a good job of explaining why there may be, any outliers outside control will be targeted. Best case scenario is that new "alternative" options keep popping up (specialized black market wallets required), purely for out-of-sight transactional purposes. Nobody will be able to risk holding any of that stuff (both for fear of loss and retaliation).JBTX wrote: ↑Fri May 07, 2021 7:03 pmTo the extent there are totalitarian regimes, they are more likely to outlaw transactions that they can't monitor. Then if you are using these technologies you are breaking the law and putting oneself at risk.Beensabu wrote: ↑Fri May 07, 2021 6:20 pmNo, actually. I don't see it at all. Everything that you have just so eloquently said completely affirms that a shift to cryptocurrencies will lead to totalitarianism.Prahasaurus wrote: ↑Fri May 07, 2021 6:09 am You quickly see why blockchain solutions offer one of the only ways in the future to prevent totalitarian governments from monitoring how we spend our money, even dictating how we spend our money.
Why would one want to invest in that vision, even if they knew how best to do it?JBTX wrote:...it isn't clear how one would invest now in that vision.
No, you completely misunderstand. Decentralized systems are the solution. The totalitarianism I described will be ushered in by centralized entities, states, rogue but powerful entities within states ("deep state"), etc. State issued digital currencies will not be run on a blockchain, or if they are, it will be a highly centralized blockchain where are small number of nodes are used and all are under the control of the state.Beensabu wrote: ↑Fri May 07, 2021 6:20 pmNo, actually. I don't see it at all. Everything that you have just so eloquently said completely affirms that a shift to cryptocurrencies will lead to totalitarianism.Prahasaurus wrote: ↑Fri May 07, 2021 6:09 am You quickly see why blockchain solutions offer one of the only ways in the future to prevent totalitarian governments from monitoring how we spend our money, even dictating how we spend our money.
Well, there are many crypto solutions that run on blockchain but are not decentralized: XRP, BNB, etc. If your preferred blockchain is not decentralized, or is not on a clear path with a clear strategy to decentralization, it will likely fail long term. As an investor, if you are not careful, you can find yourself backing a solution that, by its very nature, is doomed. And in fact in many cases is simply a get rich scheme by founders with no long term strategy to decentralize (e.g. XRP).JBTX wrote: ↑Fri May 07, 2021 7:25 pmThis is fascinating stuff. There are a lot of "ifs" involved, but an interesting vision.Prahasaurus wrote: ↑Fri May 07, 2021 6:09 amIt's easy with programmable money to, well, program how it can be used. So let's take future "food stamps," which will really be digital money airdropped to recipients into their designated digital wallets. However, those specific digital dollars would be restricted so it's only allowed to be used on certain items for the first transaction. After that first transaction, restrictions on those digital dollars would be removed. And that first transaction would need to be for food only.grok87 wrote: ↑Fri May 07, 2021 5:17 amthanks for your very informative post. re 6) "money can only be spent on certain items", it would be interesting to see how that would work out. seems like it would just generate a black market and a lot of barterPrahasaurus wrote: ↑Fri May 07, 2021 12:32 am I'm not sure if you are asking how Bitcoin will solve its deflationary problem, or how Bitcoin will solve deflation of assets in general.
But as with so many things "crypto" related, we need to stop thinking in terms of Bitcoin and more in terms of digital currencies, crypto currencies, and the technology behind. Because moving from traditional money to digital currencies will add the element of programability. This is such a radical change I don't think most people have fully grasped - or even begun to process - its implications. Certainly its ability to influence inflation and deflation in a more direct manner.
Bitcoin is just one participant in this new paradigm. Not even the most interesting, in my opinion.
What will this brave new world bring?
1 - Central banks and/or governments can issue money directly to citizens/consumers, they are no longer dependent on banks. Your stimulus check can be airdropped into your account immediately. Your account does not need to be with a bank, but can simply be a wallet on your mobile phone.
2 - All transactions will be tracked, monitored, recorded, etc. in real time. Yes, this will be a privacy nightmare when using state supported digital currencies.
3 - Taxes can be deducted at point of transaction, no need to file taxes at year end. Open blockchains are especially interesting here, as they can be programmed in such a way that audits of companies or individuals are no longer necessary, simply audits of the open source software.
4 - More payments will occur automatically using IoT technology, e.g. you walk into your supermarket, pick out your items, leave, and your mobile wallet will pay as you leave. The concept of paying for goods at a "point of sale" will blur.
5 - Programmable money allows central bankers more flexibility on inflation, deflation, etc. It allows political leaders to restrict what can be bought, how much can be bought, when it can be bought, etc. I have no doubt they are salivating over this now, which is why I'm sure we'll see digital currencies sooner rather than later. Especially as guaranteed basic incomes become more and more prevalent in the developed world with the continued rise of AI. Banks are bloated and inefficient. Perhaps required in 1840 when we all worked in fields, but so outdated now.
6 - You will see time based money to encourage spending (use case from programmable money), e.g. you are sent a stimulus check that must be used within 14 days or it will expire. Or money can can only be spent on certain items (e.g. food for the poor receiving government handouts, a moralist's dream, i.e. no more concerns that "food stamps are buying lottery tickets!" since they can now only buy food, etc.)
7 - Payments of any type will no longer need to go through banks. This might include parking fines, electricity bills, tax payments (mailing a check, LOL, it's like 1975!), whatever. Again, banks will be exposed for the blood sucking useless entities they are. Look for capital to earn interest in decentralized applications like Aave.
Banks, CPAs, tax attorneys, company auditors (replaced by software auditors), etc., goodbye. Thanks, but your services are no longer needed.
One benefit of some crypto currencies within this new system is that they can provide autonomy and hence privacy for financial transactions. An alternative payment system outside the eyes of the state. It's also why states will eventually try to ban or at least limit the use of "privacy coins" like Monero and Zcash (my favorite). Crypto will be one of the only ways people in the future will be able interact outside the eyes of our prying governments. Similar to how cash functions today. Cash, I believe, will eventually be outlawed. States lose control when you use cash. My guess is this will happen sooner than later.
cheers,
grok
A black market would be illegal and carry huge fines. As cash would be outlawed, it would be easy to monitor how food stamp recipients spend their digital dollars.
It's no surprise China is most enthusiastic about digital currencies. But I have no doubt American officials love it too. We've seen from the Snowden leaks that our government wants to know what we are all doing always. Of course to prevent terrorism (cough cough).
You quickly see why blockchain solutions offer one of the only ways in the future to prevent totalitarian governments from monitoring how we spend our money, even dictating how we spend our money. But again, it will be implemented in the name of security, convenience, etc. This is why I do think governments will go after crypto in some forms. It will start with privacy coins like Monero and Zcash. That censorship will then be extended to other projects.
As citizens of democracies, we can push back against this. They can't implement it without our consent, at least in the beginning. But education is the key. It's no surprise they want to paint crypto as only being used by criminals and terrorists. It's how they will build public support.
But ultimately as an investing forum, what does this have to do with whether Bitcoin or Ether or any of the current coins are a good investment? It doesn't seem like any of them fit into the vision you have articulated.
Maybe we eventually have flying cars. But if so, it isn't clear how one would invest now in that vision.
Thank you for that. I was under the impression all stablecoins were centralized. I've been using stablecoins for interest bearing accounts at Celsius and Ledn, getting 10 and 12.5% interest. Only Celsius takes Dai though. It's all still pretty new to me, but are there other platforms that offer similar interest rates?Prahasaurus wrote: ↑Fri May 07, 2021 10:45 pm
The only way to carve out individual freedom is to use a currency that is not under the control of the state. DAI, for instance, a dollar denominated, fully decentralized stablecoin. USDC, on the other hand, is a centralized stablecoin. Whatever the US government eventually releases will also be centralized.
Okay. I will watch. I still see issues with a system based on currencies with a limited supply that are concentrated in the hands of a relative few. It doesn't need to be controllable in order to be used to control. Ethereum might be different, but there's still the accessibility issue. It's almost like a set up for completely different financial systems for different stratums of society. And I have a big problem with that.Prahasaurus wrote: ↑Fri May 07, 2021 10:45 pmNo, you completely misunderstand. Decentralized systems are the solution. The totalitarianism I described will be ushered in by centralized entities, states, rogue but powerful entities within states ("deep state"), etc. State issued digital currencies will not be run on a blockchain, or if they are, it will be a highly centralized blockchain where are small number of nodes are used and all are under the control of the state.Beensabu wrote: ↑Fri May 07, 2021 6:20 pmNo, actually. I don't see it at all. Everything that you have just so eloquently said completely affirms that a shift to cryptocurrencies will lead to totalitarianism.Prahasaurus wrote: ↑Fri May 07, 2021 6:09 am You quickly see why blockchain solutions offer one of the only ways in the future to prevent totalitarian governments from monitoring how we spend our money, even dictating how we spend our money.
The only way to carve out individual freedom is to use a currency that is not under the control of the state. DAI, for instance, a dollar denominated, fully decentralized stablecoin. USDC, on the other hand, is a centralized stablecoin. Whatever the US government eventually releases will also be centralized.
This will be a major battle over the next decade. Pay close attention to China. They are well ahead of the US.
But to be crystal clear: fully decentralized solutions are anti-totalitarian by their very nature. Bitcoin and Ethereum fall into this camp. Nobody can control them. And that is their primary benefit.
This is the issue with all crypto as I see it. There's a speculative mania pumping it up. It's all over social media, youtube, etc. with the red laser eye meme, Musk and SNL and doge, the "ok boomer" and "have fun staying poor" comments to anyone who dare question it, etc.LifeExplorer wrote: ↑Mon May 03, 2021 3:52 pm I google and read a few articles but all of them are just pitching for the wondercoin.
Aave. Even better, it's decentralized. Rates are variable. USDC is paying 10% now. DAI is similar. But count on an average of around 8% or so.Saelina wrote: ↑Sat May 08, 2021 5:43 amThank you for that. I was under the impression all stablecoins were centralized. I've been using stablecoins for interest bearing accounts at Celsius and Ledn, getting 10 and 12.5% interest. Only Celsius takes Dai though. It's all still pretty new to me, but are there other platforms that offer similar interest rates?Prahasaurus wrote: ↑Fri May 07, 2021 10:45 pm
The only way to carve out individual freedom is to use a currency that is not under the control of the state. DAI, for instance, a dollar denominated, fully decentralized stablecoin. USDC, on the other hand, is a centralized stablecoin. Whatever the US government eventually releases will also be centralized.