There is an illusion, the illusion of money, which is the result of a combination of commodity fetishism and modern currency.
When you fall into this illusion, you can no longer tell the difference between money and commodities, between commodified money and monetized commodities, and between gold and Bitcoin.
I am sure that many people within the Fed and the Treasury are aware of this and capable of overcoming this illusion, but the question remains as to the extent to which such rationality can influence decision-maker
for now, i'll consider this is just a planned hype of bitcoin, they will not do it for real
The idea described in the post makes sense to me. Bitcoin is idealized gold.
Today gold have some advantage over bitcoin in that it has some intrinsic value. But if someone finds a way to covert iron into gold, your reserve will disappear overnight.
But no such risk for bitcoin. The maximum supply is capped at some number.
> Today gold have some advantage over bitcoin in that it has some intrinsic value.
For humans, the only things that have 'intrinsic' value are air/oxygen, shelter, water, food. (Notwithstanding things like joy/happiness and being loved by others.)
Anything else is an arbitrary / psychological trick, or sociological agreement, that we do amongst ourselves. Rocks are just part of this latter mechanism, regardless of whether they are shiny or not:
That article has a chart which shows some price fluctuations and follows that gold standard did not prevent it. But that would require the price fluctuations are only caused by changes in money supply. Which I have a hard time agreeing with.
I get the drawbacks of gold backed money. But I think it dwarfs when compared to a debt based money. Basically I think debt based economies tend to foster rampant exploitation. Yea, I think inflation is really exploitation and thievery. There is no other way to see it. Debt based economies cannot work in a fair way without a way for the community to extract values from the entities that are indebted. It might be a government, or it might be a person. When a bank gives out a loan, it can ask for some collateral. But what collateral does a government provide when it issues a bond?
So in short, a gold backed economy might hinder progress or slow it down, but it won't actually enable thievery and exploitation. But the modern economies does that, and so they are a much bigger evil than a gold backed one.
> Yea, I think inflation is really exploitation and thievery. There is no other way to see it.
CPI<0 is deflation, and history has shown how badly things go with that. CPI>>0 has had recent examples and people don't like it. CPI=0 is practically impossible, as you have measurement error and can easily slip into CPI<0 territory.
So we're left with CPI≳0, which is what most monetary policy aims for:
> So in short, a gold backed economy might hinder progress or slow it down, but it won't actually enable thievery and exploitation.
The era of the gold standard was the Gilded Age, when wealth inequality was at its highest. The US has reached that peak again by some measures—while other countries have not, which probably says more towards other social policies that are probably more important than currency regime.
Further, the gold standard causes deflation, which is a terrible burden for those that have debt, like most farmers, and anyone who has a mortgage. It can grinds down wages.
There's a reason why many regular folks hated the gold standard back in the day:
I think the community will replace it with a better algorithm and existing coins will be swapped for the new coin. Transactions might be required to be frozen for a while though..
How do you make sure that only the original owner of a P2PK can swap for the new coin, and not one who also found the private key? Isn't that private key the only thing that can be required for authorizing the swap?
You clearly don't understand. Once the BTC cryptography is compromised, there is now way to prove chain of custody, so there is no way to prove who has how much bitcoin and assign it to a new coin. Literally, in an instant, the price of BTC goes to zero.
If someone figures out a way to convert iron into gold, we are truly living in a marvellous world because this scarcity economics is finally over. In that case, who gives a shit about bitcoin.
>What distinguishes Bitcoin from Titcoin, another kind of cryptocurrency which also is with a 'capped supply'?
The presence of a growing community that are willing to accept it for good and services.
> why the gold-standard died..
You don't want the entire economy of a country to be based on capped assets. That would limit the size of your economy. But such assets can work well as a reserve. Gold works because of its intrinsic value, and is not dependent on the presence of a community that accept it. But its intrinsic value can disappear overnight.
Bitcoin works as reserve because of the presence of a growing community that accept it, and is dependent on the community. But its value would not disappear and is only decided and ensured by the community.
So it really a matter of reaching community wide consensus. Bitcoin have it right now and there is no fundamental reason why it would lose its value. Sure governments can ban it, and it ll lose its value. But if the government itself is holding reserves in it, then we can be pretty sure that that would not be done.
So to answer your question, gold standard died because it would limit the size of the economy that it can support, because supply of gold is limited.
> where __value__ comes from and how/where it is stored
Value comes from people and the work they do. A currency, or a system of money, or let us speak plainly, a system of economy tracks the value provided by a person to the community. If you have 100$ with you, that means that you have done 100$s worth of work for the community. Same with bitcoin, if you have 100 bitcoins with you, that is a proof that you have done that much work for the community. And you are entitled to the same amount of work from the community. You redeem it by paying with this currency, the other people of the community for their services.
So in otherwords, paper currency is just a distributed ledger. Instead of a ledger with some values written in a piece of paper against your name, you just hold the corresponding amount of paper currency to prove the work that you have done. When you consider all the currency held by a the people in a community, it is really a ledger that is distributed over the people in that community.
A bitcoin economy can work exactly like this. Fundamentally because in reality, in a real economy, you are not storing the value, you are tracking it.
This makes sense, because an economy really is a system that enables people helping each other, ensuring that no one takes more than they provide, or have to provide more than they take.
$100 worth of work is not the same as solving $100 of proof of work puzzles. $100 worth of work produces some value to the local community in that you deliver goods or services that somebody else wants. A proof-of-work puzzle takes a resource (electricity/compute cycles), and destroys it. IMO, Proof of work puzzles are only useful as rate limiters. POW doesn't create value like chemical processes producing pharmaceuticals, or smelting iron ore producing steel.
It started with neocons and their open declaration in mid 90s that US was not going to actually do what Bush the elder claimed with his "New World Order" speech. So that trashed any notion of "international rule of law based in UN"
then 911 happened. Who done it? Don't ask, cause we won't tell.
Then, US moral authority (in whatever sense) flushed down the toilets of Abu Gharaib and Guantanemo.
Then, the basis for US monetary hegemony was trashed - politicized international finance infrastructure.
Now, the trashing of alliances, and internally the very foundations of the republic.
United States the power was an impediment to a world government. It is being dismantled, a "bipartisan" project, and atm we are in the midst of an assets sale. Next is total bankruptcy.
When the dust is settled, certain "ally" of ours will be the superpower of our making lording it over the most critical energy and global trade corridor in the world (which will keep China in line).
Now you may go back to your "red vs blue" entertainment.
Magical thinking. They think that somehow making us all the bag holder of last resort will lead to ever increasing bitcon prices which will then be able to magically pay off the deficit.
So the idea is that this will be reinvested, leading to more productivity and job, which is a more sustainable way of getting rid of debt.
If you tax the rich, chances are that their business will cut spending, lay off people and increase unemployment. So while "Tax the rich" looks impressive if you are looking only superficially, it is not very sustainable.
I'm sorry, I'm not entertaining anyone who pushes trickle down trite at this point. It's so far beyond the point of pretending such claims are actually in good faith it's not even funny.
Somehow in the 1950s we had marginal tax rates on top earners that were like over 75%. And when the folks who talk about "making America great again" are asked what period of time they'd like to go back to they're usually thinking the 1950s.
It has a tiny bit of merit on the basis that limited wealth inequality creates opportunities for investment of the surplus capital in novel ways. Something that doesn't work well in planned economies with forced equality. What we have today with a small number of plutocrats hoarding all the wealth doesn't work because they're playing a game of exclusively enriching themselves with no incentive to trickle anything down.
There is a big space in between today's world and Harrison Bergeron. Somewhere in that space is probably the global optimum. False dichotomies are false.
Of course you are not hoping they will do out of their good of their hearts.
They would naturally want to enrich themselves, and one way to do that is launch new business and employ people, which in turn leads to the transferring back of the wealth to the people. In this manner, this also boosts economy in ways that a simple tax hike would not.
Trickle down theory is so old and boring. Instead, you can try this:
If you tax the rich, they would lose sleep. If they lose sleep, they would be tired all the day and won't be able to work at optimal level. And if the rich do not work well, then the whole economy goes downhill. So, give them tax breaks and a good night sleep. It's good for the economy.
On one hand, your idea has merit. But it is not without subtle risks. These could be mitigates by doing proper mitigation measures. But again, you cannot be sure how this will work out. May be the rich have some assets that they can sell off to meet the increased tax burden. This means that they don't have to manage those assets, which can contribute to reduced stress, which could lead to a better nights sleep. This will in turn cause them to wake up and exploit the worker class with increased vigor. But they could also use their now superfluous attention to engage in reddit or hackernews or watch youtube reels, and start zombifing and eventually end up being a d-crat..So who knows how it will work out.
I'm waiting from them to realize they can force the social security administration to buy their magic computer money with treasuries from the social security trust fund.
I don't think it could ever be able to pay of the federal debt, the entire market cap of all cryptos is only a tenth of what the US federal government owes.
Someone on reddit theorized that this announcement was designed to push Bitcoin hire to help Tesla. Tesla showed $600 million income in Q4 of 2024 thanks to a change in the way crypto is accounted for due to their Bitcoin holdings.
I am wondering if a BTC rugpull is inevitable. For the whales, why not just transition to another coin.
They see potential, they jump in on new coin, new coin flies. I don’t see why they wouldn’t. Microstrategy, musk and trump can collude. I don’t think there are any regulations stopping them. I don’t see why they wouldn’t, either. Unless they are worried about PR or that is just a difficult way to increase wealth.
Sounds like a fantastic way for bad actors to liquidate US reserves and then run away with them. which the current administration has proven, repeatedly, that they are.
"but it's just some mild economic policies, bro" -- HN, probably
I can't decide if this administration is purposely trolling, or of the trolling is a byproduct. Either way, they seem to reliably trigger everyone on the left, and a few on the right, too.
I am neither left nor right just a pragmatic minimalist. The minimalist in me does like some of the things they are doing given the tech industry make me very used to it and I can see the long term benefits. Every leader in the last few decades has pinky-promised to downsize the government. bigger topic obviously, given the careless and reckless way it is being done.
The logical part of me can not fathom why governments are getting into unregistered unlicensed securities. [1] I can understand some of us plebs getting sucked up into it from desperation but the federal government of all entities should know better given they made laws about it in the 1930's due to fraud. The conspiracy theorist in me has a gut feeling this might be a way to circumvent FDIC backing so when they induce a collapse everyone just loses everything.
How would this circumvent FDIC backing? They wouldn't need to anyways. The FDIC only has around $120B, which is basically a joke compared to the bailouts that would be required in a collapse scenario.
the last executive order was that bitcoin can only be acquired using “budget neutral” strategies in addition to stuff the US Marshals already had
so now they have found budget neutral ways
our gold reserves have been valued at $42 per troy ounce for like 80 years
their market value is $3000 per troy oz, so selling them at market value doesnt adversely impact the budget because they werent part of it to begin with
It seems like the White House is planning on selling US gold holding above a specific dollar value. Since the price of gold in dollars is rising, mostly because the price of the dollar is falling, then they're probably planning on emptying a significant portion of the US gold reserve to allow every major Bitcoin holder to clear their positions.
The article seems to be aggregated from some Benzinga website:
>Founded in 2010 by Jason Raznick, Benzinga is a financial technology, media, and data company based in Detroit, Michigan. The website also features a news service that publishes financial news.
When you fall into this illusion, you can no longer tell the difference between money and commodities, between commodified money and monetized commodities, and between gold and Bitcoin.
I am sure that many people within the Fed and the Treasury are aware of this and capable of overcoming this illusion, but the question remains as to the extent to which such rationality can influence decision-maker
for now, i'll consider this is just a planned hype of bitcoin, they will not do it for real