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[McTraveller]

My personal opinion is that cryptocurrencies treat the wrong symptom.  The problem with the banking system or government controlled currency isn't keeping track of the ledgers.  The real problem is how creation and destruction of currency is handled.

We pay these with their other imaginary construct, money.

Note that money isn't really "an imaginary construct" created by "those in power."  Money was created to get around the problems associated with direct bartering.  What most people forget though (I blame the education system for this, because it should be taught but isn't, except in rare cases. I guess I lucked out?) is that currency is actually a form of anonymous debt.

When I buy a sandwich from you for $10, what that means is that you give me something tangible/valuable now, in exchange for some tokens that you hope someone (anyone) will take at a later date in exchange for something tangible/valuable.  It's a non-written contract that you hope someone will honor the debt represented by those units of currency.  It's also why things like cigarettes are used for currency in certain situations - it addresses the barter issue by allowing for deferred repayment of a debt and by people who didn't incur the debt in the first place.

In most (all?) modern monetary systems, creation and destruction of currency units it not actually tied to production of goods and services, but is tied instead for demand for currency.  In addition the creation of currency is not managed by the people wanting to make a transaction either - it is managed by the banks or by the blockchain miners.  It also doesn't help that (as far as I know) there is no cryptocurrency that is a "primary" currency - they all require conversion to or from some other fiat currency.  That is - does any exchange, say, have a miner loan their coins out as primary currency without exchange for other currency?  (It would have to be the miners, because they are the only ones that get coins without having to "buy in".)

[Max™]

The transaction confirmation delay is the real killer.

Exactly. As untraceable (and therefore tax free) international barter good, Bitcoin and its ilk are ideal.

As a daily medium of exchange for multiple purchases, fiat currency will remain king unless and until cryptocurrency resolves the delay between the buyer authorizing a transaction and the seller receiving the funds.

Fiat currency will always have a value because it can be used for payment of taxes. Taxes, just like money, are an imaginary construct created by those in power. We pay these with their other imaginary construct, money.

As soon as you can pay your taxes with Bitcoin, it will be a legitimate type of money. Until then, it's a commodity, and a highly volatile one at that.

I wish I'd invested in it ten years ago as well, but there's always going to be high risk investments you'd wished you'd put money into in hindsight, whether it be the stock market, lottery tickets or horse races. I'm not gonna lose sleep over taking the lower risk option.

Given that the verification process will get slower and slower over time (a consequence of the employed algorithm), and is betting on processors getting faster and faster... it's not getting faster any time soon.

You don't seem the type to spam FUD like this, bitcoin is one algorithm, there are many.

[Max™]

I mean, you can just read up on: https://en.wikipedia.org/wiki/Blockchain and see that there isn't "a" blockchain algorithm.

[Jimmy]

Note that money isn't really "an imaginary construct" created by "those in power."  Money was created to get around the problems associated with direct bartering.  What most people forget though (I blame the education system for this, because it should be taught but isn't, except in rare cases. I guess I lucked out?) is that currency is actually a form of anonymous debt.

When I buy a sandwich from you for $10, what that means is that you give me something tangible/valuable now, in exchange for some tokens that you hope someone (anyone) will take at a later date in exchange for something tangible/valuable.  It's a non-written contract that you hope someone will honor the debt represented by those units of currency.  It's also why things like cigarettes are used for currency in certain situations - it addresses the barter issue by allowing for deferred repayment of a debt and by people who didn't incur the debt in the first place.

In most (all?) modern monetary systems, creation and destruction of currency units it not actually tied to production of goods and services, but is tied instead for demand for currency.  In addition the creation of currency is not managed by the people wanting to make a transaction either - it is managed by the banks or by the blockchain miners.  It also doesn't help that (as far as I know) there is no cryptocurrency that is a "primary" currency - they all require conversion to or from some other fiat currency.  That is - does any exchange, say, have a miner loan their coins out as primary currency without exchange for other currency?  (It would have to be the miners, because they are the only ones that get coins without having to "buy in".)

I disagree, as the federal treasury, or their various national counterparts, are in essence a factory that prints theoretical values under the auspice of the current powers that be. This is exactly what I refer to when describing an imaginary construct.

There's one another major form of wealth creation in play in the economy besides the printing of money, namely bank loans and their accrued debts in the form of interest, which is the form of currency you're likely referring to. Like taxes, loan interest is another imaginary form of wealth, at least for the creditor. A debtor defaulting on that debt destroys that imaginary wealth, a la global financial crisis. Suddenly everyone wakes up and sees that they don't really have as much wealth as they thought they did, and once that wealth evaporates, the economy deleverages to compensate.

You could argue that the treasury is another form of debt engine, since the banknote is essentially a guarantee against the imaginary debts created by the government in the form of taxes, but that's a rather obtuse and roundabout method of thinking. Ultimately they print value out of thin air.

[McTraveller]

I disagree, as the federal treasury, or their various national counterparts, are in essence a factory that prints theoretical values under the auspice of the current powers that be. This is exactly what I refer to when describing an imaginary construct.

There's one another major form of wealth creation in play in the economy besides the printing of money, namely bank loans and their accrued debts in the form of interest, which is the form of currency you're likely referring to.

:
:

I was merely commenting on the idea that 'money' is merely a creation of those currently in power.  It isn't.  I do agree though that the current monetary system is absolutely a power structure though, not merely a trade facilitation device.

I observe two issues with most modern currency systems.  One is with the general public at large - there is still massive confusion between 'money' and 'wealth.' I think maybe this is half intentional misinformation (or intentionally not correcting the error) by the "powers that be" and half just general ignorance.  Money isn't wealth, but money can buy you wealth.  This is painfully evident by basically every economic downturn and bubble and hyperinflation event ever - the prices of things change dramatically even when the quantity and quality of material goods and the capability of the economy to do work (which is what wealth really is) doesn't change nearly as fast.

The second is perhaps the one that I think you are observing / feeling: the current monetary systems create money "backwards".  That is, monetary systems today generally issue money as a way to convince people to create wealth, rather than people that create wealth creating money to indicate that they haven't yet obtained the actual wealth they wanted in exchange for the stuff they created.  That is, money is created and generally used as a way to get people to make stuff - "you will get this money if you make something."  This is terribly backwards - money creation should be done when "I have created something and given it to you and I'm accepting deferred compensation".

The biggest crimes in my mind of the monetary system are first convincing people that those that hold the money are the ones in control, when it's really the people who actually produce things that should be in control.  As an aside, I'm not talking about "this means labor is more important than capital" - what I'm talking about is correct understanding that money should really represent a debt owed to you, but that concept is broken when people can create money and therefore essentially just declare that people owe them something without having actually started with a deferred compensation situation.  The second is systematically making it so that the people who create wealth are not the ones that generate money.

[Jimmy]

Unless you're advocating for socialist economics by controlling the means of production, there's little that will change this status quo inside the structure of a free market economy backed by private enterprise investment. And whilst socialist economics are great in theory, history shows they fail in practice, unless used as a hybrid along with more traditional capitalist market theory.

At the end of the day, a dollar spent by one person, whether it be earned through creation of a physical product, supply of labor, invention of intellectual property, or payment of interest on debt, represents a dollar of income for another person. The big difference that divides the exchange is what the income represents as a creation of wealth. Physical goods are the easiest to quantify, but labor is also a creation of wealth, for it enables the process of consumption of created goods. Intellectual creations are another more abstract form of wealth creation, but their contribution is to create a new market of demand and consumption. Debt as a wealth creation mechanism is the hardest to quantify, but ultimately it does serve an economic purpose when used to enable investment in the creation of wealth in the form of the first three categories.

I mean, theoretically there's no real value to any physical product outside of what we agree is their value, the same as bitcoin. Food has value because we can consume it for survival, but that value ties merely to the labor cost of growing it yourself versus letting someone else do the work. Clothing, shelter, transport, and any of the million other aspects of existence we use on a daily basis all tie their value to the same equation: How hard is it to produce this myself instead? Thus a wage is created, with those jobs that require more skill or investment typically commanding higher wages than those with lower entry levels.

And since money is the storage device for the labor cost of the job performed, those with more money command more power to create labor. The crux lies within the negotiation of what price those who perform the labor expect in exchange, and that advantage is usually in favor of the buyer. Ultimately it's inevitable that wealth will tend to aggregate in small concentrations due to the power of stored labor to enable even more wealth creation. Short of radical wealth redistribution, this is a reality of market forces. Taxation is one of those redistribution mechanisms, and loan defaults from individuals or failed investments form another ad hoc method.

[McTraveller]

Unless you're advocating for socialist economics by controlling the means of production, there's little that will change this status quo inside the structure of a free market economy backed by private enterprise investment. And whilst socialist economics are great in theory, history shows they fail in practice, unless used as a hybrid along with more traditional capitalist market theory.

I'm not sure I follow - money supply mechanisms are fairly independent from who owns means of production.

At the end of the day, a dollar spent by one person, whether it be earned through creation of a physical product, supply of labor, invention of intellectual property, or payment of interest on debt, represents a dollar of income for another person. The big difference that divides the exchange is what the income represents as a creation of wealth. Physical goods are the easiest to quantify, but labor is also a creation of wealth, for it enables the process of consumption of created goods. Intellectual creations are another more abstract form of wealth creation, but their contribution is to create a new market of demand and consumption. Debt as a wealth creation mechanism is the hardest to quantify, but ultimately it does serve an economic purpose when used to enable investment in the creation of wealth in the form of the first three categories.

 
This isn't actually as complex as it sounds. In fact, the field of economics already has a definition of wealth that covers this, and I used it above - wealth is the quantity and quality of goods and the capacity to create goods and services.  Historically the definition was even more limiting: only manufacturing and agriculture produce wealth; everything else merely shifts it around.  The definition has expanded somewhat, because of "intellectual" goods like software.  That is where "the capacity to create goods and services" part comes in - a well educated population has a higher capacity to create goods and services, for instance, so is more wealthy than a less-educated population with exactly the same resources and current set of goods and infrastructure, etc.

I mean, theoretically there's no real value to any physical product outside of what we agree is their value, the same as bitcoin. Food has value because we can consume it for survival, but that value ties merely to the labor cost of growing it yourself versus letting someone else do the work. Clothing, shelter, transport, and any of the million other aspects of existence we use on a daily basis all tie their value to the same equation: How hard is it to produce this myself instead? Thus a wage is created, with those jobs that require more skill or investment typically commanding higher wages than those with lower entry levels.

That's a possible definition of 'value' but not the only one.  An arguably more accurate for value isn't "how hard is it to produce this myself instead", but merely "what am I willing to give up to get this?"  I prefer the latter definition, because it more accurately reflects observation.  The amount of effort it takes to, say, make my own shirt is roughly constant - so the value of the shirt is demonstrably not tied to the amount of effort it takes to make it.  What does change is what I'm willing to give up to get a shirt.  This is why the value of goods and services can change quite dramatically over time, independent of the labor it takes to make something.  Why is a Lincoln more valuable than a Ford? If you've been in manufacturing you know they take very close to the same amount of labor to create - they are often even made in the same factory by the same exact workforce.

And since money is the storage device for the labor cost of the job performed, those with more money command more power to create labor.

Money doesn't store labor cost. Money stores value (and loosely, at that), which doesn't even have a theoretical lower limit of labor cost.

The crux lies within the negotiation of what price those who perform the labor expect in exchange, and that advantage is usually in favor of the buyer. Ultimately it's inevitable that wealth will tend to aggregate in small concentrations due to the power of stored labor to enable even more wealth creation. Short of radical wealth redistribution, this is a reality of market forces. Taxation is one of those redistribution mechanisms, and loan defaults from individuals or failed investments form another ad hoc method.

The problem with wealth concentration isn't really in how money is created and destroyed though. The problems with wealth concentration are due to property ownership laws, laws around works-for-hire, IP laws, zoning laws, and tax rules associated with passive income (that is, income you get for merely being an owner of something, rather than from being actively involved).

I've posted many times on this forum that I'd be in favor of progressive property taxes (don't think that exists anywhere at all today) and for much higher rates on capital gains than from ordinary income.  Sadly, this is not what our powers-that-be impose: they have high income taxes (which is taxing "active" income), flat (or nonexistent - look at tax breaks governments use to get people to build factories in their jurisdictions) property taxes, and relatively low capital gains taxes.

To bring it back to bitcoin and other similar currencies: yeah they are neat, but they can't solve major economic issues because most of the economic issues aren't really related to who controls the currency ledgers.

[Reelya]

I'd argue that nobody has actually ever tried a proper Marxist socialism. The Marxist model is based on workers controlling their own place of employment. The "commune" was Marx's basic unit of operation, and a "commune" was an autonomous, democrat organization that controls one piece of production, e.g. a factory. "Communism" was thus a group of communes working together.  Basically, they would form a network of local democratic councils, and the higher levels would reflect the negotiations between the different communes, in a similar manner to how state and federal politics arise from local organization in a modern western democracy. None of these things, it should be clear, were even attempted in Russia or China. So there's no real argument to be made that Marx's idea of decentralizing political power and the ownership of factories into the hands of the workers in those factories failed because it never actually happened.

In one view, you have two main ideas on where power flows from in politics. Top-down and bottom-up. I'd argue that Marx was a proponent of bottom-up organization, e.g. decentralize power and voting to local organizations, then build up from there. e.g. Marx has more in common with Libertarians than he does with state socialists like the Chinese. Marx is basically a Libertarian who also holds that all workers should be voting shareholders in the company that they work at. e.g. Marx takes democracy as the starting point then one-ups it by saying that workplaces should be democratic too. Right now, if you work for a company it's basically a dictatorship.

Lenin/Stalin were proponents of much more traditional "top down" views of power and control. Like other empires, Lenin/Stalin had a "holy book" that they used to justify their own imperial power. They gave lip service to Marx's writings the same way that the Inquisition and Crusaders gave lip service to Jesus' writings, while following none of the actual things in that book. And in a similar fashion, Lenin/Stalin had to be the sole interpreters of the "holy book" of Marx, so the first thing they did on assuming power was to work on exterminating all the Anarchist and Socialist parties, because by doing so, they eliminated anyone who could critique their own "one true interpretation" of the "holy book".

Similar to an idea of a "false dichotomy" we have in the west two "competing" systems of government and corporations. Everyone is fighting about which one "should" have more power. And here's the kicker: the same class of people run both. And they run the media. Should it be any surprise that these people have a vested interest in fostering the debate that you have to pick either "big government" or "big corporations" and there are no alternatives? It's possible that the dispute is an internal dispute within the ruling class over who gets the biggest share of the accumulated top-down power. Perhaps the corporate/government aligned media is framing the issue in a self-serving way that marginalizes all possibilities outside of it?

This is a bit of an aside from the Bitcoin thing, so don't read any particular viewpoint in there, but it's still topic relevant to think about.

[WealthyRadish]

It's difficult to overestimate the lasting damage the USSR (Stalin in particular) did to socialism and anarchism. I recently finished Orwell's Homage to Catalonia, which includes interesting accounts of the extent of soft influence that the USSR had both among left-wing governments (such as Republican Spain) and non-governing socialist parties, and how they abused it. Time and time again socialist parties were confronted with a party line originating in Moscow that betrayed basic socialist ideals for the sake of the USSR's political expediency, and pressured to either embrace it or be denounced as "Trotskyists" or crypto-fascists. Not only did it push the movement in entirely the wrong direction (full of hypocrisy and often justified criticisms that the parties served foreign interests), it created irreconcilable divisions (among groups already notorious for infighting) and discredited the entire movement by association.

But this is a tired argument that everyone has heard a billion times, and sounds a lot like the argument from an apologist. It's why I don't usually identify as a socialist; "socialism" has become a largely meaningless term, and if the ideas themselves are good they can survive under any other term.

[Reelya]

I don't think it's really apologism, it's more pointing out that we are in fact talking apples and oranges here. If someone says "I don't like oranges" while you're offering them an apple, it's not apologism for  oranges to point out that you're holding an apple.

When you say "socialism is a largely meaningless term" what you're really saying is that socialism covers a vast set of fairly unrelated ideas. That is actually even more reason to say it's wrong to dismiss anything covered by socialism as "failed", since most of them weren't implemented by the failed states at all. It would be equivalent to eating an orange, not liking it, then claiming all fruit are oranges, and you won't like them either. But not liking oranges isn't actually a good predictor of not liking apples. And then when someones says "at least give apples a try" they respond angrily, "you're just one of those dirty Orangists!"

It's not really about "calling" yourself a socialist. The fact is, when someone says the "socialism failed", they're not in fact saying "the specific things the USSR did failed", they're making a blanket claim that anything that could conceivably receive the "socialism" label is an automatic fail: e.g. they're making a blanket claim that pretty much everything that's not mainstream market capitalism is an instant fail, regardless of evidence and however tenuously it's actually connected to the USSR.

That pretty much negatively effects everyone who isn't a hardcore capitalist supporter, no matter what they call themselves.

[Antioch]

Huge cryptocurrency losses this week.

I think this is just the start of the burst, high probability of a large crash in the coming weeks.

Wouldn't be surprised if bitcoin hits as low as $3k, which about corresponds to its historic growth.

[smjjames]

It's difficult to overestimate the lasting damage the USSR (Stalin in particular) did to socialism and anarchism. I recently finished Orwell's Homage to Catalonia, which includes interesting accounts of the extent of soft influence that the USSR had both among left-wing governments (such as Republican Spain) and non-governing socialist parties, and how they abused it. Time and time again socialist parties were confronted with a party line originating in Moscow that betrayed basic socialist ideals for the sake of the USSR's political expediency, and pressured to either embrace it or be denounced as "Trotskyists" or crypto-fascists. Not only did it push the movement in entirely the wrong direction (full of hypocrisy and often justified criticisms that the parties served foreign interests), it created irreconcilable divisions (among groups already notorious for infighting) and discredited the entire movement by association.

But this is a tired argument that everyone has heard a billion times, and sounds a lot like the argument from an apologist. It's why I don't usually identify as a socialist; "socialism" has become a largely meaningless term, and if the ideas themselves are good they can survive under any other term.

Yeah, here in the US (among politicians anyway), "socialism" has pretty much become code for "thing I don't like or don't agree with". More that some just get hung up on the word without actually taking a look at what is being called that.

[Sheb]

Huge cryptocurrency losses this week.

I think this is just the start of the burst, high probability of a large crash in the coming weeks.

Wouldn't be surprised if bitcoin hits as low as $3k, which about corresponds to its historic growth.

Or even lower. Bitcoin has no "intrisic" value, for all we know it could crash to a buch a piece.

[Antioch]

Huge cryptocurrency losses this week.

I think this is just the start of the burst, high probability of a large crash in the coming weeks.

Wouldn't be surprised if bitcoin hits as low as $3k, which about corresponds to its historic growth.

Or even lower. Bitcoin has no "intrisic" value, for all we know it could crash to a buch a piece.

One of the thinks about bitcoin itself is that it is arguably one of the worst serious cryptocurrencies made. Its network isn't made at all to transfer the amount of money currently in it. Transfer fees have reached above $10 and transfer times can be hours.

[Sheb]

Huge cryptocurrency losses this week.

I think this is just the start of the burst, high probability of a large crash in the coming weeks.

Wouldn't be surprised if bitcoin hits as low as $3k, which about corresponds to its historic growth.

Or even lower. Bitcoin has no "intrisic" value, for all we know it could crash to a buch a piece.

One of the thinks about bitcoin itself is that it is arguably one of the worst serious cryptocurrencies made. Its network isn't made at all to transfer the amount of money currently in it. Transfer fees have reached above $10 and transfer times can be hours.

That's actually a thing I'm confused about: isn't the entire point of Bitcoin that the transfers are free because the people maintaining the blockchain are paid by new bitcoins being created?