Netherlands must ban cryptocurrencies immediately: CPB head(nltimes.nl)
nltimes.nl
Netherlands must ban cryptocurrencies immediately: CPB head
https://nltimes.nl/2021/06/11/netherlands-must-ban-cryptocurrencies-immediately-cpb-head
210 comments
Previous discussion: https://news.ycombinator.com/item?id=27470109
> "Cryptocurrencies are essentially neither money nor a financial product, but an example of what Nobel laureate Robert Shiller calls a 'contagious narrative': a contagious story in which people believe because other people believe in it."
Which is exactly what money is, to begin with.
Which is exactly what money is, to begin with.
Like the stop sign bubble. Those stop signs dont actually stop cars, they just work because of the contagious narrative
This is so deep I can't tell if you're joking or not.
There are rural towns that have a completely different concept for a stop sign... backed by a lack of enforcement from officers.
There are rural towns that have a completely different concept for a stop sign... backed by a lack of enforcement from officers.
It's actually a secret reference to the buddhist idea of "conventional reality", things that exist only by convention or agreement among people: political office, property ownership, money, diplomas, marriage, borders, ... most of modern life
Schelling point is another name for this.
Not quite as it is a more specific term - a Schelling point is a social construct but not all social constructs are Schelling points.
In particular a Schelling point is a default chosen without communicating it in the first place. None of the above examples count.
In particular a Schelling point is a default chosen without communicating it in the first place. None of the above examples count.
Don’t try to stop completely at each stop sign, that’s impossible.
Instead, only try to realize the truth... there are no stop signs.
Instead, only try to realize the truth... there are no stop signs.
I actually HATE crypto discussions on HN, and clicked on this link before thinking -- and wow this is a great comment. It is very deep! I'm very glad I clicked. Well done.
Come to Florida where all road signs are merely suggestions /s. However, this is the strongest argument I've seen for why money is money, crypto is crypto, stop signs stop cars, and "DO NOT CROSS" keeps people out.
Traffic Control Protocol is known to be a best-effort.
well, there's also the force of law behind stop signs.
A contagious narrative backed by guns indicates weakness of narrative
To the contrary: It must be a pretty strong narrative if it convinces people to commit violence.
Well first of all, I would argue the force of law is a social contract, not a contagious narrative.
My second point to make here would be if vehicle drivers stopped following road signs, they would be likely to harm other drivers and bystanders. We have stop signs for a pretty good reason.
My second point to make here would be if vehicle drivers stopped following road signs, they would be likely to harm other drivers and bystanders. We have stop signs for a pretty good reason.
And money.
Anecdote: I’ve seen a dozen people roll through stop signs today.
In high school my friend's dad used to tell new drivers that the stop signs with the white borders around them were optional.
Small difference: neither currency nor stops sign have speculation as rhe primary usage.
Your point may be true, but it's not a rebuttal to the parent's assertion that "contagious narratives" are a normal part of many generally accepted systems. It's like you're throwing in random information.
That tax bill I get every year payable only in dollars isn't imaginary.
You only believe you need to pay it because others believe you need to pay it.
[deleted]
Money is a contagious story plus guns.
I need to acquire USD to pay my tax bill, otherwise men with guns come and take away my house and put me in jail. That establishes a baseline value for USD.
I need to acquire USD to pay my tax bill, otherwise men with guns come and take away my house and put me in jail. That establishes a baseline value for USD.
If none of the services and goods trade in USD, the goverment will soon collect taxes in something else than USD
The people selling the goods and services need to pay taxes too, so they will have to trade in USD.
No, they just need to exchange it at the very end.
No, money has value because the government makes it law that debt is payable with it; that's what gives a government's currency legitimacy. If the government made a law that debt could be paid with bitcoin, it would no longer fit Shiller's description.
We can pay local taxes in Bitcoin in Zug, Switzerland.
https://www.bloomberg.com/news/articles/2020-09-03/swiss-can...
https://www.bloomberg.com/news/articles/2020-09-03/swiss-can...
We've had this in the U.S. for a while too, the trick is that they don't actually accept bitcoin, they just pay a 3rd party which charges a fee and converts it to regular currency.
And companies, states, ... What is a company? The contracts? Then it's just paper with ink. The buildings? It's just concrete. All of that don't exist naturally, it's a shared narrative. That these concepts can be enforced doesn't change that fact. That's not to say these concepts are not useful, civilization is built on them. The book Sapiens does a better job than me explaining that idea if you are interested.
You don't need to believe in money for it to work. People use the dollar, not because they insist the dollar is valuable, but because the dollar is convenient.
Cryptos are not even a single narrative, if I wanted to be really negative, I'd say it's more like a tumor. A wild bunch of slightly similar yet always evolving narratives wrap in thin sheet of fad.
95% of it is superstition.
It's a really strange bridge of mainstream / tech and finance, where very few people have a serious clue.
95% of it is superstition.
It's a really strange bridge of mainstream / tech and finance, where very few people have a serious clue.
Physical money has value because we have an economy. If you have a USD, you can come to the US and spend that dollar. Bitcoin doesn't have an economy, it is literally a meme. The only thing you can do with it is trade it for real money.
The value of USD is based on the US economy. The value of Bitcoin is based on people's perception of the value of Bitcoin.
The value of USD is based on the US economy. The value of Bitcoin is based on people's perception of the value of Bitcoin.
If all programmers decide to be paid in crypto, and you need a programmer, the crypto has the same value as USD ("backed by programmers")
If everyone in your economy decides to be paid in crypto, USD will find itself in a very bad position.
Your economy is now driven by USD, but it's not a law in any way.
Your economy is now driven by USD, but it's not a law in any way.
“The value of USD is based on US economy” but far from being an expert I suspect that what is behind at then is human perception and trust, you can choose to keep the token USD or token Bitcoin depending what you perceive as being safer or trustworthy, and some people prefer to have eggs in both baskets.
Real life currency also has the backing of the economy they represent. That's why USD is "strong" and Zimbabwean dollars were "weak."
Crypto has nothing. It's just environmental destruction and/or pump and dump schemes.
Crypto has nothing. It's just environmental destruction and/or pump and dump schemes.
When people decide to use crypto instead of USD, your economy is not backed by USD anymore.
The dollar is still backed by the economy though. It's fundamentally the government's ability to pay down debt from taxes.
There's plenty of valid criticisms against crypto, I feel like they've picked some of the weakest ones.
> cryptocurrencies are used because people think they will one day replace traditional money
Maybe a tiny minority, sounds like a strawman.
> a contagious story in which people believe because other people believe in it
Isn't fiat the same? Money only has value because people believe it has value / will have value in the future / trust whoever prints it.
> cryptocurrencies are used because people think they will one day replace traditional money
Maybe a tiny minority, sounds like a strawman.
> a contagious story in which people believe because other people believe in it
Isn't fiat the same? Money only has value because people believe it has value / will have value in the future / trust whoever prints it.
Fiat is backed by weapons. The same weapons that defend your house from other countries and force you to give up half your salary.
My main criticism to cryptocurrencies is that they're mostly unbacked. The ones that are backed by Fiat have similar problems to Fiat currency (why would I need that?), the ones that are backed by physical assets are much more interesting - but they don't seem to be the mainstream ones, probably because you can't speculate on it.
This makes me think cryptocurrencies are mainly about speculation more than rebelling against governments and central banks.
My main criticism to cryptocurrencies is that they're mostly unbacked. The ones that are backed by Fiat have similar problems to Fiat currency (why would I need that?), the ones that are backed by physical assets are much more interesting - but they don't seem to be the mainstream ones, probably because you can't speculate on it.
This makes me think cryptocurrencies are mainly about speculation more than rebelling against governments and central banks.
> Fiat is backed by weapons. The same weapons that defend your house from other countries and force you to give up half your salary
This is a very American view of fiat (and governmental role in general). It's a logic that only works if you're talking about the strongest military and associated country out of all alternatives, and at this point it falls apart. How do weapons protect the value of the Angolan kwanza or the Singaporean dollar? Neither of these countries could do anything militarily if a sizeable number of countries did not support their value.
This is a very American view of fiat (and governmental role in general). It's a logic that only works if you're talking about the strongest military and associated country out of all alternatives, and at this point it falls apart. How do weapons protect the value of the Angolan kwanza or the Singaporean dollar? Neither of these countries could do anything militarily if a sizeable number of countries did not support their value.
Do Angola and Singapore not have police that enforce that their residents pay their tax bills?
Irrelevant. These currencies are traded on forex exchanges outside their native countries, which means outside the jurisdiction of said police.
> Neither of these countries could do anything militarily if a sizeable number of countries did not support their value.
That kwanza exchange graph looks like it has nothing backing it.
If you doubt his point go look at Ukrainian hryvnia exchange rates graph, try to guess at which point Crimea thing happened.
That kwanza exchange graph looks like it has nothing backing it.
If you doubt his point go look at Ukrainian hryvnia exchange rates graph, try to guess at which point Crimea thing happened.
Any government that only accepts payment for taxes or other obligations in their own currency is backing their currency with the force of law and creating real demand for it.
They don't need sizeable number of countries. Only one major one.
> Fiat is backed by weapons.
What does this mean? It's the currency of a country that has weapons. If someone steals my USD, will US use their weapons to get it back for me? If the value of their currency drops substantially, will they go to war with some unknown power that's causing this drop and reverse the change? Countries also change currencies, often during times of inflation.
This is an effectively meaningless statement
What does this mean? It's the currency of a country that has weapons. If someone steals my USD, will US use their weapons to get it back for me? If the value of their currency drops substantially, will they go to war with some unknown power that's causing this drop and reverse the change? Countries also change currencies, often during times of inflation.
This is an effectively meaningless statement
> If the value of their currency drops substantially, will they go to war with some unknown power that's causing this drop and reverse the change?
They might - that’s essentially what the U.S. has done (or, at least, did for a while) when other nations tried to break the petrodollar system.
They might - that’s essentially what the U.S. has done (or, at least, did for a while) when other nations tried to break the petrodollar system.
Good point, but this isn't really a good thing :-/
> What does this mean?
I have found that viewing money as a regular good eases the thought process.
The price of money is regulated by demand and supply. Most of the demand comes because government requires taxes to be paid in the fiat money. Also because businesses are required to accept fiat as payment.
I have found that viewing money as a regular good eases the thought process.
The price of money is regulated by demand and supply. Most of the demand comes because government requires taxes to be paid in the fiat money. Also because businesses are required to accept fiat as payment.
The weapons are for using against their own residents.
US residents need to pay taxes in USD. If they don't, weapons will be used to force them to pay (most pay voluntarily, but if they escalate far enough, the weapons will come out).
That means US residents need to acquire USD and are willing to trade valuable assets to do so. That makes USD valuable to US residents.
US residents own many valuable non-fiat assets, so non-US residents know that they will be able to find a US resident who will trade them something valuable in exchange. That makes USD valuable to non-US residents.
The same thing is true of more or less every fiat currency that has a non-negligible value.
US residents need to pay taxes in USD. If they don't, weapons will be used to force them to pay (most pay voluntarily, but if they escalate far enough, the weapons will come out).
That means US residents need to acquire USD and are willing to trade valuable assets to do so. That makes USD valuable to US residents.
US residents own many valuable non-fiat assets, so non-US residents know that they will be able to find a US resident who will trade them something valuable in exchange. That makes USD valuable to non-US residents.
The same thing is true of more or less every fiat currency that has a non-negligible value.
The argument is that every year the us government will demand you pay a certain amount in USD (taxes). If you fail to comply men with guns (the police) will arrest you and put you in prison.
And not just any weapons but thousands of strategic and tactical nuclear weapons.
Stablecoins have opened up some interesting ideas about what it means to be backed/unbacked; even ones that are stablised/pegged algorithmically:
https://www.theancientbabylonians.com/what-is-terra-luna/ has a good summary
https://www.theancientbabylonians.com/what-is-terra-luna/ has a good summary
Various valued materials that are valued only for their rarity are similarly unbacked, and also mined.
Most prominent metals have considerable industrial use, which makes those metals valuable, and makes them de facto backed in a big way (by the demand for them). Bitcoin has modest industrial/economic use, at present (and obviously other cryptos may present different advantages in that regard, given time).
You also can't physically wear Bitcoin and show off status, unlike Gold, Silver and Platinum.
If gold gets cheap enough people will use it in their wallpaper because humans have an insatiable demand for luxury goods. That will never change. It's why people still adorn themselves with sparkly rocks and shiny metals after 20,000 years of supposed evolution and refinement.
The store of value argument for Bitcoin is fully legitimate; as are the arguments for building potent economic uses on top of blockchains. There's no reason humans can't invent superior stores of value, and ever better transaction & contract systems. However, those various valued physical metals are not unbacked. Bitcoin is unbacked, and it can be replaced by other coins in the near future, coins that are technologically superior for storing value, and so on. The properties that we like metals for, industrially, make them difficult to replace in most cases; the demand - at an industrial minimum - will remain for a long time to come accordingly. And the human population keeps expanding (~80m per year), the odds are zero the next two billion people will suddenly stop having any interest in wearing/owning gold as a status symbol, and that puts an enormous demand factor under gold (on top of the fact that the median has gotten richer, so their demand for luxury goods has skyrocketed; see: China 1990-2020).
Try mining new sums of scarce metals, or any metals for that matter. Try inventing a new metal.
Now try cloning Bitcoin or Litecoin. Trivial, relatively speaking. There are thousands of bullshit crypto clones, and there will be thousands more to come. Bitcoin is temporarily special due to acceptance. There is little industrial demand under that fickleness however, which means Bitcoin can easily fall out of favor, exchanged for the next popular fad coin that people decide is the better way to store value (click, click, you just converted your Bitcoin over to the next more popular coin, byebye Bitcoin; now try that process with physical metals that you need for manufacturing purposes).
You also can't physically wear Bitcoin and show off status, unlike Gold, Silver and Platinum.
If gold gets cheap enough people will use it in their wallpaper because humans have an insatiable demand for luxury goods. That will never change. It's why people still adorn themselves with sparkly rocks and shiny metals after 20,000 years of supposed evolution and refinement.
The store of value argument for Bitcoin is fully legitimate; as are the arguments for building potent economic uses on top of blockchains. There's no reason humans can't invent superior stores of value, and ever better transaction & contract systems. However, those various valued physical metals are not unbacked. Bitcoin is unbacked, and it can be replaced by other coins in the near future, coins that are technologically superior for storing value, and so on. The properties that we like metals for, industrially, make them difficult to replace in most cases; the demand - at an industrial minimum - will remain for a long time to come accordingly. And the human population keeps expanding (~80m per year), the odds are zero the next two billion people will suddenly stop having any interest in wearing/owning gold as a status symbol, and that puts an enormous demand factor under gold (on top of the fact that the median has gotten richer, so their demand for luxury goods has skyrocketed; see: China 1990-2020).
Try mining new sums of scarce metals, or any metals for that matter. Try inventing a new metal.
Now try cloning Bitcoin or Litecoin. Trivial, relatively speaking. There are thousands of bullshit crypto clones, and there will be thousands more to come. Bitcoin is temporarily special due to acceptance. There is little industrial demand under that fickleness however, which means Bitcoin can easily fall out of favor, exchanged for the next popular fad coin that people decide is the better way to store value (click, click, you just converted your Bitcoin over to the next more popular coin, byebye Bitcoin; now try that process with physical metals that you need for manufacturing purposes).
While in Switzerland we do have some weapons, it is not like Swiss franc is backed by our army, which is purely defensive.
And, in fact, here you can pay municipal and cantonal taxes with cryptocurrencies.
And, in fact, here you can pay municipal and cantonal taxes with cryptocurrencies.
I think the parent is talking about chartalism (https://en.wikipedia.org/wiki/Chartalism), which is essentially the idea that fiat currencies derive their value from the fact that taxes must be paid in them.
A sort of "just so" story about this would go something like (with much credit to David Graeber):
"Way back when, some Assyrian king got the great idea to, instead of giving their soldiers food and drink, give their soldiers tokens. They would then demand a certain number of those tokens per head from their subjects. Suddenly the tokens have value, and the subjects are put to work selling goods and services to the army."
I'm not an expert on this theory, but there are potential oddities, similar to your points:
* This would suggest the value of the currency is closely tied to the total taxation. (Why, for example, is the Swiss Franc highly valued by investors outside of Switzerland?) I guess you could validate or invalidate this by looking at whether the ratio of M2 to annual tax revenue is somewhat fixed (across currencies) or quite fluid?
* This fails to explain currencies which retain value after they are no longer in use by a central government (as with the Somali shilling, as noted in the Wikipedia article) or, indeed, Bitcoin.
Personally, my sense is that chartalism is correct as an explanation for one way to bootstrap a currency, but clearly (as Bitcoin shows) is not the only way to bootstrap a currency, and once you create a level of reliable demand, you no longer need it (hence the Somali shilling or, perhaps, the high valuation of the CHF outside of Swiss taxpayers).
A sort of "just so" story about this would go something like (with much credit to David Graeber):
"Way back when, some Assyrian king got the great idea to, instead of giving their soldiers food and drink, give their soldiers tokens. They would then demand a certain number of those tokens per head from their subjects. Suddenly the tokens have value, and the subjects are put to work selling goods and services to the army."
I'm not an expert on this theory, but there are potential oddities, similar to your points:
* This would suggest the value of the currency is closely tied to the total taxation. (Why, for example, is the Swiss Franc highly valued by investors outside of Switzerland?) I guess you could validate or invalidate this by looking at whether the ratio of M2 to annual tax revenue is somewhat fixed (across currencies) or quite fluid?
* This fails to explain currencies which retain value after they are no longer in use by a central government (as with the Somali shilling, as noted in the Wikipedia article) or, indeed, Bitcoin.
Personally, my sense is that chartalism is correct as an explanation for one way to bootstrap a currency, but clearly (as Bitcoin shows) is not the only way to bootstrap a currency, and once you create a level of reliable demand, you no longer need it (hence the Somali shilling or, perhaps, the high valuation of the CHF outside of Swiss taxpayers).
I think the value of a currency comes from the creditworthiness of the country issuing it.
If someone nuked the USA and burn down the entire USA army and economy, the dollar wouldn't have much value.
The USA army protects the states. Switzerland, as per parent's post, has defense agreements with other countries. The likelihood of Switzerland being attacked or destroyed is also very low. What would the international community think of a country attacking Switzerland?
If I started my own country in the middle of the ocean and started issuing my own currency it would be worthless. Maybe if I do some trade deals and a defense agreement with some other country it would start having some value.
The difference with BTC is that there is no-one defending BTC with weapons. It can all be banned tomorrow if global governments think it would be good to do so. Similarly, I can spin my own fork of BTC and achieve similar technology advance as BTC.
If someone nuked the USA and burn down the entire USA army and economy, the dollar wouldn't have much value.
The USA army protects the states. Switzerland, as per parent's post, has defense agreements with other countries. The likelihood of Switzerland being attacked or destroyed is also very low. What would the international community think of a country attacking Switzerland?
If I started my own country in the middle of the ocean and started issuing my own currency it would be worthless. Maybe if I do some trade deals and a defense agreement with some other country it would start having some value.
The difference with BTC is that there is no-one defending BTC with weapons. It can all be banned tomorrow if global governments think it would be good to do so. Similarly, I can spin my own fork of BTC and achieve similar technology advance as BTC.
I agree with your last part, but not the reasoning, exactly. :)
If you started your own currency it would be worthless because of the lack of demand for it.
Right now Bitcoin has a market cap of about 800bn USD, which (coincidentally) is about the same value as the CHF M1. (M2 is a little over a trillion USD.) These are crude indicators that there's substantial aggregate demand for both assets.
What's interesting is how Bitcoin got to that point. Quite a few years ago, it wasn't worth much at all, and you could only use it to pay people who were ideologically motivated to accept it—your crazy coworker who'd let you pay him back for beers in BTC, for example.
Then you add in the people who will use it for practical reasons (they're criminals, they are underbanked, they want payments under the table), the people who will use it for reasons of mass delusion (they think they'll get rich), and suddenly you have substantial aggregate demand—enough that you can reasonably assume a BTC will be worth something in the future (though highly unstable demand still).
This seems to be (to my knowledge) an uncharted path to creating a "recognized" currency.
But as to your point about fiat: if the US government were nuked, you'd have massive economic disruption for other reasons. But this isn't per se why the USD is valuable (anymore?).
If you started your own currency it would be worthless because of the lack of demand for it.
Right now Bitcoin has a market cap of about 800bn USD, which (coincidentally) is about the same value as the CHF M1. (M2 is a little over a trillion USD.) These are crude indicators that there's substantial aggregate demand for both assets.
What's interesting is how Bitcoin got to that point. Quite a few years ago, it wasn't worth much at all, and you could only use it to pay people who were ideologically motivated to accept it—your crazy coworker who'd let you pay him back for beers in BTC, for example.
Then you add in the people who will use it for practical reasons (they're criminals, they are underbanked, they want payments under the table), the people who will use it for reasons of mass delusion (they think they'll get rich), and suddenly you have substantial aggregate demand—enough that you can reasonably assume a BTC will be worth something in the future (though highly unstable demand still).
This seems to be (to my knowledge) an uncharted path to creating a "recognized" currency.
But as to your point about fiat: if the US government were nuked, you'd have massive economic disruption for other reasons. But this isn't per se why the USD is valuable (anymore?).
> If I started my own country in the middle of the ocean and started issuing my own currency it would be worthless.
Not necessarily, if you were using it within your own country, the use case for most currencies. A fiat currency is little more than a promissory note or IOU (think about how I could go to a bank and exchange my dollar for a dollar's worth of gold during the gold-backed fiat period). In fact, less than 200 years ago many banks were able to issue their own currencies as promissory notes in many US states and were valid, but only with those banks.
The idea of an all-powerful national currency that bans all others is relatively new from a global perspective and even today, there are parts of the world where small communities have and still do issue their own local currencies in order to facilitate local trade.
Not necessarily, if you were using it within your own country, the use case for most currencies. A fiat currency is little more than a promissory note or IOU (think about how I could go to a bank and exchange my dollar for a dollar's worth of gold during the gold-backed fiat period). In fact, less than 200 years ago many banks were able to issue their own currencies as promissory notes in many US states and were valid, but only with those banks.
The idea of an all-powerful national currency that bans all others is relatively new from a global perspective and even today, there are parts of the world where small communities have and still do issue their own local currencies in order to facilitate local trade.
> the Somali shilling
Pump the breaks. Have you read the Wikipedia page about the Somali Shilling?
https://en.wikipedia.org/wiki/Somali_shilling
> Following the breakdown in central authority that accompanied the civil war beginning in the early 1990s, the value of the Somali shilling plunged. The Central Bank of Somalia, the nation's monetary authority, also shut down operations. Rival producers of the local currency, including autonomous regional entities such as the Puntland territory, subsequently emerged. These currencies included the Na shilling, which failed to gain widespread acceptance, and the Balweyn I and II, forgeries of pre-1991 bank notes. Competition for seigniorage drove the value down to about $0.04 per ShSo (1000) note, approximately the commodity cost. Consumers also refused to accept bills larger than the 1991 denominations, which helped to stop devaluation from spiraling further upwards. The pre-1991 notes and subsequent forgeries were treated as the same currency. It took large bundles to make cash purchases, and the United States dollar was often used for larger transactions.
Essentially, it's not like the economy of Somalia remained at a status quo when central banks and government went absent. The civil war of the 1990's essentially ripped the nation apart in autonomous region, local economies, black markets,... with many different competing currencies, forgeries of the Shilling and little to no rule of law depending on where you were.
As of late, this is changing as power is centralized again and instilled in a legitimate government:
> In the late 2000s, Somalia's newly established Transitional Federal Government revived the defunct Central Bank of Somalia. The monetary authority assumed the task of both formulating and implementing monetary policy.[6] Owing to a lack of confidence in the Somali shilling, the U.S. dollar was widely accepted as a medium of exchange alongside the Somali shilling. Dollarization notwithstanding, the large issuance of the Somali shilling increasingly fueled price hikes, especially for low-value transactions. The new Central Bank of Somalia expects this inflationary environment to come to an end as soon as the Central Bank assumes full control of monetary policy and replaces the presently circulating currency introduced by the private sector.
> With a significant improvement in local security, Somali expatriates began returning to the country for investment opportunities. Coupled with modest foreign investment, the inflow of funds helped the Somali shilling increase considerably in value. By March 2014, the currency had appreciated by almost 60% against the U.S. dollar over the previous 12 months. The Somali shilling was the strongest among the 175 global currencies traded by Bloomberg, rising close to 50 percentage points higher than the next most robust global currency over the same period.
Also, the acceptance of a currency in a community is backed by the fact that you can take a dispute to a court of law which carries the legitimacy to enforce the rule of law. That is, if you are indebted and you want to repay a debt using legal tender, you have the assurance that the debt will be extinguished at least in the eyes of an authority. Or, more to the point, there's assurance that the authority will protect you from creditors seeking further satisfaction from you.
https://en.wikipedia.org/wiki/Legal_tender
Pump the breaks. Have you read the Wikipedia page about the Somali Shilling?
https://en.wikipedia.org/wiki/Somali_shilling
> Following the breakdown in central authority that accompanied the civil war beginning in the early 1990s, the value of the Somali shilling plunged. The Central Bank of Somalia, the nation's monetary authority, also shut down operations. Rival producers of the local currency, including autonomous regional entities such as the Puntland territory, subsequently emerged. These currencies included the Na shilling, which failed to gain widespread acceptance, and the Balweyn I and II, forgeries of pre-1991 bank notes. Competition for seigniorage drove the value down to about $0.04 per ShSo (1000) note, approximately the commodity cost. Consumers also refused to accept bills larger than the 1991 denominations, which helped to stop devaluation from spiraling further upwards. The pre-1991 notes and subsequent forgeries were treated as the same currency. It took large bundles to make cash purchases, and the United States dollar was often used for larger transactions.
Essentially, it's not like the economy of Somalia remained at a status quo when central banks and government went absent. The civil war of the 1990's essentially ripped the nation apart in autonomous region, local economies, black markets,... with many different competing currencies, forgeries of the Shilling and little to no rule of law depending on where you were.
As of late, this is changing as power is centralized again and instilled in a legitimate government:
> In the late 2000s, Somalia's newly established Transitional Federal Government revived the defunct Central Bank of Somalia. The monetary authority assumed the task of both formulating and implementing monetary policy.[6] Owing to a lack of confidence in the Somali shilling, the U.S. dollar was widely accepted as a medium of exchange alongside the Somali shilling. Dollarization notwithstanding, the large issuance of the Somali shilling increasingly fueled price hikes, especially for low-value transactions. The new Central Bank of Somalia expects this inflationary environment to come to an end as soon as the Central Bank assumes full control of monetary policy and replaces the presently circulating currency introduced by the private sector.
> With a significant improvement in local security, Somali expatriates began returning to the country for investment opportunities. Coupled with modest foreign investment, the inflow of funds helped the Somali shilling increase considerably in value. By March 2014, the currency had appreciated by almost 60% against the U.S. dollar over the previous 12 months. The Somali shilling was the strongest among the 175 global currencies traded by Bloomberg, rising close to 50 percentage points higher than the next most robust global currency over the same period.
Also, the acceptance of a currency in a community is backed by the fact that you can take a dispute to a court of law which carries the legitimacy to enforce the rule of law. That is, if you are indebted and you want to repay a debt using legal tender, you have the assurance that the debt will be extinguished at least in the eyes of an authority. Or, more to the point, there's assurance that the authority will protect you from creditors seeking further satisfaction from you.
https://en.wikipedia.org/wiki/Legal_tender
Interesting, thanks!
I certainly agree with what you wrote. But I think the point still stands that this is hardly black and white—the shilling did supposedly stay in circulation, right?
The argument about taxes and legal tender certainly show ways to increase demand for a currency, but they appear to be somewhat unnecessary, as with BTC.
We may in fact be agreeing. My premise is that chartalism is an interesting idea which can help color questions of why a given currency becomes accepted, but ultimately isn't literally true—other mechanisms of increasing demand for a currency may also be effective.
I certainly agree with what you wrote. But I think the point still stands that this is hardly black and white—the shilling did supposedly stay in circulation, right?
The argument about taxes and legal tender certainly show ways to increase demand for a currency, but they appear to be somewhat unnecessary, as with BTC.
We may in fact be agreeing. My premise is that chartalism is an interesting idea which can help color questions of why a given currency becomes accepted, but ultimately isn't literally true—other mechanisms of increasing demand for a currency may also be effective.
> My main criticism to cryptocurrencies is that they're mostly unbacked.
The fact of a currency being "backed" by something went away in 1933. No currency is "backed".
> This makes me think cryptocurrencies are mainly about speculation more than rebelling against governments and central banks.
Yeah, they are about speculation. Whether investing in crypto rather than some other financial asset constitutes "rebelling" is subjective.
The fact of a currency being "backed" by something went away in 1933. No currency is "backed".
> This makes me think cryptocurrencies are mainly about speculation more than rebelling against governments and central banks.
Yeah, they are about speculation. Whether investing in crypto rather than some other financial asset constitutes "rebelling" is subjective.
Fiat currencies are mostly "backed" by the necessity to pay taxes and other government fees using them.
The US Dollar has the additional advantage of being the currency through which most large financial trade transactions are required to be paid.
Ultimately, however, this backing is mostly possible through the unexpressed coercive threat of legal action and ultimately force.
The US Dollar has the additional advantage of being the currency through which most large financial trade transactions are required to be paid.
Ultimately, however, this backing is mostly possible through the unexpressed coercive threat of legal action and ultimately force.
> Fiat is backed by weapons.
This is one of the most hilarious misunderstandings of how monetization works. Is someone from the army going to come shoot me if I charge too many USD for a hamburger?
This is one of the most hilarious misunderstandings of how monetization works. Is someone from the army going to come shoot me if I charge too many USD for a hamburger?
No, but someone from the police will show up if you don't pay your taxes in USD.
Also really important, police will show up if you are counterfeiting USD. One of the neat things about cryptocurrency is that the supply is not protected by threat of force unlike fiat.
Because if someone comes up with the ability to counterfeit crypto that's it for that crypto. There's no need for it to continue, unlike a nations currency.
Oh yeah if someone counterfeits crypto in general it all comes crashing down.
One note is double spends are kind of like counterfeiting, and they happen on smaller chains regularly, they haven't happened on any of the dominate ones, or proof of stake protected coins.
One note is double spends are kind of like counterfeiting, and they happen on smaller chains regularly, they haven't happened on any of the dominate ones, or proof of stake protected coins.
Because they’ve done a great job “protecting” the supply of the USD…
Bitcoin’s anti-counterfeiting is a hell of a lot better than the USD’s anti-counterfeiting.
Bitcoin’s anti-counterfeiting is a hell of a lot better than the USD’s anti-counterfeiting.
I am very glad that the US passed big spending bills for COVID, if that's what you are concerned about. Fiat currency has the feature of being able to borrow against the future.
Just a minute ago you were taking about how great it was that USD’s supply was “protected”. Fickle.
While I didn't say it was great that the USD's supply is protected from being counterfeit, I do believe it is great that USD isn't overrun by couterfeits.
I also believe it's a sovereign country's right to print it's own money as it sees fit. As a citizen I am glad we are willing to spend when people are hurting.
I also believe it's a sovereign country's right to print it's own money as it sees fit. As a citizen I am glad we are willing to spend when people are hurting.
Great, so there’s guaranteed to be enough demand for USD to pay tax obligations, which probably represents like 3% of its other sources of demand.
Which is alone, way more than what most cryptocurrencies have to offer in terms of built in value.
If the USD is attacked (through a weak point such as counterfeiting) the largest military power in the world will make that stop.
If a cryptocurrency currency us attacked (through a weak point such as a 50% attack), what do you really have that can put a stop to that? All you can do is fork the chain and hope it doesn't happen again.
If the USD is attacked (through a weak point such as counterfeiting) the largest military power in the world will make that stop.
If a cryptocurrency currency us attacked (through a weak point such as a 50% attack), what do you really have that can put a stop to that? All you can do is fork the chain and hope it doesn't happen again.
38% of US spending is by the government. In case you hadn't noticed they spend their money in US dollars.
That doesn’t even remotely imply that the USD would only crash to 38% of its current value if the only thing people used it for was paying US taxes. It would almost certainly go a lot lower. However, it’s hard to predict with any precision.
> Fiat is backed by weapons.
I interpret this to mean:
The major fiat currencies are ultimately backed by their respective government's willingness to use war to preserve their economic interests.
The other fiat currencies are based on the level of mutual interest in economic partnerships or trade relations between the majors and the non-majors.
...
This is intuitively sensible to me, but I am not an economist.
I interpret this to mean:
The major fiat currencies are ultimately backed by their respective government's willingness to use war to preserve their economic interests.
The other fiat currencies are based on the level of mutual interest in economic partnerships or trade relations between the majors and the non-majors.
...
This is intuitively sensible to me, but I am not an economist.
Also more prosaically force is used to prevent anyone from counterfeiting Fiat currency. In the US that was why the secret service was created.
Obviously if anyone could print USD it'd be near worthless.
Obviously if anyone could print USD it'd be near worthless.
Fiat is slightly different in that the government can guarantee a certain level of demand for it by requiring taxes to be paid in it. If you you don't like jail and have a tax liability in US, you can't think dollars are worthless.
> Fiat is slightly different in that the government can guarantee a certain level of demand for it by requiring taxes to be paid in it
Until they switch currencies. For instance Brazil did this
> The cruzeiro (Portuguese pronunciation: [kɾuˈzejɾu]) was the currency of Brazil from 1942 to 1986 (two distinct currencies) and again between 1990 and 1993. In August 1993 it was replaced by the short-lived Cruzeiro Real, itself replaced less than a year aftwards by the Real.
India also demonitized a certain denomination of their currency
> On 8 November 2016, the Government of India announced the demonetisation of all ₹500 and ₹1,000 banknotes of the Mahatma Gandhi Series. It also announced the issuance of new ₹500 and ₹2,000 banknotes in exchange for the demonetised banknotes.
Until they switch currencies. For instance Brazil did this
> The cruzeiro (Portuguese pronunciation: [kɾuˈzejɾu]) was the currency of Brazil from 1942 to 1986 (two distinct currencies) and again between 1990 and 1993. In August 1993 it was replaced by the short-lived Cruzeiro Real, itself replaced less than a year aftwards by the Real.
India also demonitized a certain denomination of their currency
> On 8 November 2016, the Government of India announced the demonetisation of all ₹500 and ₹1,000 banknotes of the Mahatma Gandhi Series. It also announced the issuance of new ₹500 and ₹2,000 banknotes in exchange for the demonetised banknotes.
Declaring certain currency notes to be valueless doesn't change the demand for currency. It reduces supply.
But people still need it to pay taxes and the government will only pay for services with it.
In most developed nations, the government is responsible for 20%+ of the total GDP, so that's an inbuilt "floor" to the value of its currency.
So yes, the government can change the currency and the notes, but they control the supply and demand of whatever they deem to be the currency.
But people still need it to pay taxes and the government will only pay for services with it.
In most developed nations, the government is responsible for 20%+ of the total GDP, so that's an inbuilt "floor" to the value of its currency.
So yes, the government can change the currency and the notes, but they control the supply and demand of whatever they deem to be the currency.
Right, but it doesn't really help me as someone holding the currency. I can have X dollars in my bank account, government can then declare these dollars are worthless or you have to change it to this new currency at some rate that is set by the state. Neither of these things are good for me and I would hardly call that the government "backing" the currency that I hold.
[Hi from Argentina!] I'm not sure about the details of the transitions in Brazil, but each time there is a change of money here the bank accounts are transformed instantly to the new denomination and the bills and coin coexist for some time, like 3 or 6 months. It's more a cosmetic change, to make the numbers no overflow in the bank system. It also has a psychological effect, because with the change the government pinky promise not to take stupid economic decisions and reduce the inflation.
If you owe taxes and don't have dollars, but have property, IRS will gladly take that. And I doubt they will look at what type of property it is - a house, a stock, a crypto.
Except in the last case, if you use your own keys, you have a choice of either going to jail and keeping the money, or giving it away in exchange for your freedom. In all other cases the only option to hold on to the property - is successfully physically fight with law enforcement to defend your rights to the property (which is quite futile for the most of us).
Except in the last case, if you use your own keys, you have a choice of either going to jail and keeping the money, or giving it away in exchange for your freedom. In all other cases the only option to hold on to the property - is successfully physically fight with law enforcement to defend your rights to the property (which is quite futile for the most of us).
This guarantee surely helped quite a bit in Zimbabwe, Venezuela and hundreds more similar cases. /s
FYI I can pay my taxes in crypto in Switzerland.
> Maybe a tiny minority
Wait, what? That’s like the main reason people give when pumping it - “Bitcoin will replace fiat and it’s a good hedge against normal money.”
Wait, what? That’s like the main reason people give when pumping it - “Bitcoin will replace fiat and it’s a good hedge against normal money.”
When normal money has failed good luck finding a wall charger to get into your Bitcoin wallet. Or more precisely the thing that makes electricity and computer hardware cheap and which is a prerequisite for crypto is a functional economic system. It is unlikely that a functional economic system will stay a whilst there is at the same time a collapse in fiat and a subsequent rise in crypto. It feels like wishful thinking.
Currency collapses happen all the time without bringing down the electrical grid/internet.
… and crypto fluctuates wildly all the time, with the electricity on for no reason whatsoever other than random whims of speculative investors.
What are you talking about? We have never seen the collapse of all fiat currencies nor even the collapse of a single major fiat currency.
This is exactly what I don’t understand about the doomsday crowd. How exactly do they plan on using crypto amidst worldwide pandemonium?
They think they’ll be able to exchange their funny money for real money, just in time, and stash it in their bug-out bags along with bullets and beef jerky.
you’re thinking of “normal money” failing as a on/off switch. Things are going degrade over time and there needs to be mass adoption if crypto is going to replace fiat currency.
so in reality I think a transition to crypto is possible/likely if it’s indeed a transition and the incentives to do so will be aligned with what the people in power want.
so in reality I think a transition to crypto is possible/likely if it’s indeed a transition and the incentives to do so will be aligned with what the people in power want.
For quite a while the prevailing sentiment has been that bitcoin is a store of value and more akin to gold not dollars.
At any rate, there's plenty of crypto with much different aims.
At any rate, there's plenty of crypto with much different aims.
Only by people with no understanding of economics.
The demand for Gold is primarily functional and is generally larger that the speculative demand. This puts a floor on on its value.
Cryptocurrency is almost pure speculation and thus has no floor to its value.
The demand for Gold is primarily functional and is generally larger that the speculative demand. This puts a floor on on its value.
Cryptocurrency is almost pure speculation and thus has no floor to its value.
Personally, I don't know anyone that believes that..
I mostly see it as an adjunct - like credit cards. Another option..
I mostly see it as an adjunct - like credit cards. Another option..
What the heck does that mean? Credit cards in the US are a dollar based instrument, and they extend credit to consumers and simplify payments for merchants and consumers both.
Crypto isn’t credit. Or much of a payment means at present. So what specifically do you mean by “other option”?
This seems like a dodge. The common meme is that crypto will be valuable because it will be the money of the future and appreciate along the way.
Crypto isn’t credit. Or much of a payment means at present. So what specifically do you mean by “other option”?
This seems like a dodge. The common meme is that crypto will be valuable because it will be the money of the future and appreciate along the way.
It means an easy way to pay for goods and transfer value.
I had good luck doing both with crypto in the past. And being old enough to remember when the only options for 'moving' money were wire transfer and western union - I appreciate the speed and low cost.
If you really are that bothered by it - think of it as a 'collective barter' system. You can pick which systems you want to support (if any) and collectively a 'value' is placed on the 'points'. As I recall, there were a few good sized barter collectives in the US, big enough the govt. started taxing barter 'income'? (it was years ago though, so my memory could be off)
As for 'a dodge' - you're the one quoting the least nuanced views, and throwing aspersions. Maybe stop getting financial advice off you-tube ?
If you really are that bothered by it - think of it as a 'collective barter' system. You can pick which systems you want to support (if any) and collectively a 'value' is placed on the 'points'. As I recall, there were a few good sized barter collectives in the US, big enough the govt. started taxing barter 'income'? (it was years ago though, so my memory could be off)
As for 'a dodge' - you're the one quoting the least nuanced views, and throwing aspersions. Maybe stop getting financial advice off you-tube ?
Yeah so within the US it wouldn't really matter. On a global scale it would be nice to have a form of money that is not dependent on the whims of politicians.
That’s a nice way to describe anti money laundering and tax compliance laws.
Easier money transfers for the law abiding are a real problem to be solved (and new companies are making it much easier!) but widespread evasion of laws isn’t a great approach.
Easier money transfers for the law abiding are a real problem to be solved (and new companies are making it much easier!) but widespread evasion of laws isn’t a great approach.
If it helps any...
With the new KYC stuff, I can't get fiat out of my cryptos till after they sequence my DNA..
Seriously, its ridiculous.. Neither my bank, credit, or brokerage accounts required jumping thru so many hoops.
With the new KYC stuff, I can't get fiat out of my cryptos till after they sequence my DNA..
Seriously, its ridiculous.. Neither my bank, credit, or brokerage accounts required jumping thru so many hoops.
I find it hard to believe that you spend time on HN and possibly other crypto-focused websites, but have never seen this sentiment?
I've seen it...I just don't personally know anyone that subscribes to it.
Just like I don't know anyone that plans to retire off lotto winnings? Most of the people I know, might dream a bit about 'hitting it big' - but none are expecting cash/fiat to go away.
Just like I don't know anyone that plans to retire off lotto winnings? Most of the people I know, might dream a bit about 'hitting it big' - but none are expecting cash/fiat to go away.
I should probably mention, no one I know is taking out second mortgages, risking their homes, or anything else like that.
These two aspects are some of my least favorite of the crypto community. Hyping up this future techno utopia without banks, while the real end goal is to increase the amount of real currency in their possession.
This doesn't describe the whole community, but a large portion of those on different crypto forums.
I have respect for those truly interested in the tech side of things and those looking to make money on a speculative asset, but people who mix those two drive me crazy because it seems so inauthentic
This doesn't describe the whole community, but a large portion of those on different crypto forums.
I have respect for those truly interested in the tech side of things and those looking to make money on a speculative asset, but people who mix those two drive me crazy because it seems so inauthentic
Indeed, i would like to see how long Buterin would work on eth without funding, savings and rent to pay around the corner.
Vitalik worked on a Bitcoin newsletter and coded blockchains and worked on Ethereum for little to no money for years. He didn't care about money and is as much of a pure tech guy as there is.
> Maybe a tiny minority, sounds like a strawman.
I don't think so, i believe many people think that a private and decentralized solution will replace traditional money. That just isn't an argument against it. If anything, it's an argument FOR cryptocurrencies.
> Isn't fiat the same?
haha yes.
I don't think so, i believe many people think that a private and decentralized solution will replace traditional money. That just isn't an argument against it. If anything, it's an argument FOR cryptocurrencies.
> Isn't fiat the same?
haha yes.
No, fiat is backed by economies.
In case of the USD, it's the biggest economy there is.
In case of the USD, it's the biggest economy there is.
The argument used in the article is "citing fraud, criminal use, and financial instability"
Fiat currency of course never being used in those.
Cryptocurrencies are an object of value due to scarcity alone. In that sense, it is no different from various rare materials.
The difference with fiat is that governments mandate that it be legal tender, that al who do business must accept it but I am left to wonder, what if I were to open a store and accept bitcoins and euros, as I must operating in an area where euros are legal tender, — what if I simply make the price in euros so much higher than that in bitcoins that no one would ever pay in euros over bitcoins.
Is this legal? can the government tell me how to set my own prices for different currencies?
Cryptocurrencies are an object of value due to scarcity alone. In that sense, it is no different from various rare materials.
The difference with fiat is that governments mandate that it be legal tender, that al who do business must accept it but I am left to wonder, what if I were to open a store and accept bitcoins and euros, as I must operating in an area where euros are legal tender, — what if I simply make the price in euros so much higher than that in bitcoins that no one would ever pay in euros over bitcoins.
Is this legal? can the government tell me how to set my own prices for different currencies?
> Fiat currency of course never being used in those.
The difference is being able to do it instantly across global distances, thereby circumventing regulators/border checks/banks/etc...
> Cryptocurrencies are an object of value due to scarcity alone.
This is sort of a silly assertion. Many things are scarce, yet have no value. If I create a new crypto coin, it would have zero value.
> it is no different from various rare materials.
Raw materials have uses outside their tradability.
> if I were to open a store and accept bitcoins
You would likely go bankrupt by the volatility. Most shops make <10% margin on all goods. You cannot accept payment in a coin that might be worth less than the value of the goods you need to restock for tomorrow.
The difference is being able to do it instantly across global distances, thereby circumventing regulators/border checks/banks/etc...
> Cryptocurrencies are an object of value due to scarcity alone.
This is sort of a silly assertion. Many things are scarce, yet have no value. If I create a new crypto coin, it would have zero value.
> it is no different from various rare materials.
Raw materials have uses outside their tradability.
> if I were to open a store and accept bitcoins
You would likely go bankrupt by the volatility. Most shops make <10% margin on all goods. You cannot accept payment in a coin that might be worth less than the value of the goods you need to restock for tomorrow.
> This is sort of a silly assertion. Many things are scarce, yet have no value. If I create a new crypto coin, it would have zero value.
But you cannot create a new first coin.
Part of the value is that it was the first, similar to how the first painting ever made by a famous artist, though often of inferior quality to later works, is often more valuable. — there is only first, and that makes it scarcer.
> Raw materials have uses outside their tradability.
I said rare: there are a variety of materials, such as, say, Jade, which have no known industrial application and their value simply comes from their rarity.
> You would likely go bankrupt by the volatility. Most shops make <10% margin on all goods. You cannot accept payment in a coin that might be worth less than the value of the goods you need to restock for tomorrow.
That is irrelevant to my hypothetical of whether I can use such a scheme to effectively not accept legal tender.
But you cannot create a new first coin.
Part of the value is that it was the first, similar to how the first painting ever made by a famous artist, though often of inferior quality to later works, is often more valuable. — there is only first, and that makes it scarcer.
> Raw materials have uses outside their tradability.
I said rare: there are a variety of materials, such as, say, Jade, which have no known industrial application and their value simply comes from their rarity.
> You would likely go bankrupt by the volatility. Most shops make <10% margin on all goods. You cannot accept payment in a coin that might be worth less than the value of the goods you need to restock for tomorrow.
That is irrelevant to my hypothetical of whether I can use such a scheme to effectively not accept legal tender.
You are not actually required to accept legal tender for anything besides debts. If the transaction is simultaneous, you are not required to accept legal tender (at least in the US.) This is why stores don't have to accept cash and be card only.
Edit: I am speaking about the US, unsure how this generalizes everywhere.
Edit: I am speaking about the US, unsure how this generalizes everywhere.
You also have to keep in mind the context here.
The Netherlands is a country that keeps its citizens under a tax slavery, that will make sure 80 to 85 % of all income you earn over the course of your lifetime will be taken away.
Taken away in progressive income taxes, property taxes, inheritance taxes, pension taxes etc... Despite the massive levels of taxation citizen benefits are nowhere near the levels of Nordic countries like Denmark, Sweden or Finland.
Medical insurance has been privatized and its one of the more expensive in the world. Most Dutch residents will even boast their medical insurance bills are only in the 250 to 350 EUR range has they have been led to believe. They forget to check the percentage that is taken from their salary contributions, what makes it for the middle class at the same high levels of insurance as in the US.
With the exception of a family of 5 persons, who by law, does not have to pay taxes, this has a massive effect of quickly dividing the population into two very distinctive camps:
A camp that has to be very politically docile, as this large amount of population, are completely dependent on governments handouts around social housing, child subsidies, the famous and numerous "Uitkering's", etc....
The other part of population , a large middle class, is quickly made to understand any additional working efforts, that could produce any additional income will be quickly taken away by very aggressive levels of taxation. So you better go home at 4 PM or work just 4 days per week, as it is common in the country. This is sometimes touted by political spin doctors as an example of the middle class "high quality of life". It does have it advantages, but its simply not the core reason.
This makes for a very stable and homogeneous society. All those common rows of all equal houses that see in these Dutch pictures or google maps... Makes you come out of your house, look at the house of neighbor and think, neither is doing much better than me and neither I am doing that bad :-))
The country also has much smaller levels of income disparity compared to what is seen in many other European countries. It is common to see in a Dutch company, just 4 to 6 different salary levels including the CEOs. Some European countries like Spain or Italy ( lets not even talk the US), have income level between regular workers and company administrators can have a 40x to 50x difference.
So, although crypto at the moment, has serious issues around its climate impact and scalability of transaction settlement, that is the last thing in this gentleman mind. He is thinking, control and nothing else. The reason why he considers it "urgent" is the lack of societal control it will imply.
Depending on your social values and priorities, you might see this statement from a Central Bank head as: - The biggest argument against crypto. or - The biggest endorsement of the advantages of crypto currency as touted by many of its believers.
The future of crypto as a concept will probably not be Bitcoin, Ethereum but something else. Still, we should not forget what is also at play here is political control of citizens. The last thing on the mind of this central bank is investors protection.
You just have to see the historical record of this specific central bank, and their 100% incompetence in protecting these same investors, they so much talk about now, against the past bankruptcy of large Dutch financial institutions.
The Netherlands is currently a healthy democracy, but you just have to look around. The more repressive societies are the most interested in abolishing crypto or forcing citizens to adopt a "specific" digital currency: https://www.wsj.com/articles/china-creates-its-own-digital-c...
The Netherlands is a country that keeps its citizens under a tax slavery, that will make sure 80 to 85 % of all income you earn over the course of your lifetime will be taken away.
Taken away in progressive income taxes, property taxes, inheritance taxes, pension taxes etc... Despite the massive levels of taxation citizen benefits are nowhere near the levels of Nordic countries like Denmark, Sweden or Finland.
Medical insurance has been privatized and its one of the more expensive in the world. Most Dutch residents will even boast their medical insurance bills are only in the 250 to 350 EUR range has they have been led to believe. They forget to check the percentage that is taken from their salary contributions, what makes it for the middle class at the same high levels of insurance as in the US.
With the exception of a family of 5 persons, who by law, does not have to pay taxes, this has a massive effect of quickly dividing the population into two very distinctive camps:
A camp that has to be very politically docile, as this large amount of population, are completely dependent on governments handouts around social housing, child subsidies, the famous and numerous "Uitkering's", etc....
The other part of population , a large middle class, is quickly made to understand any additional working efforts, that could produce any additional income will be quickly taken away by very aggressive levels of taxation. So you better go home at 4 PM or work just 4 days per week, as it is common in the country. This is sometimes touted by political spin doctors as an example of the middle class "high quality of life". It does have it advantages, but its simply not the core reason.
This makes for a very stable and homogeneous society. All those common rows of all equal houses that see in these Dutch pictures or google maps... Makes you come out of your house, look at the house of neighbor and think, neither is doing much better than me and neither I am doing that bad :-))
The country also has much smaller levels of income disparity compared to what is seen in many other European countries. It is common to see in a Dutch company, just 4 to 6 different salary levels including the CEOs. Some European countries like Spain or Italy ( lets not even talk the US), have income level between regular workers and company administrators can have a 40x to 50x difference.
So, although crypto at the moment, has serious issues around its climate impact and scalability of transaction settlement, that is the last thing in this gentleman mind. He is thinking, control and nothing else. The reason why he considers it "urgent" is the lack of societal control it will imply.
Depending on your social values and priorities, you might see this statement from a Central Bank head as: - The biggest argument against crypto. or - The biggest endorsement of the advantages of crypto currency as touted by many of its believers.
The future of crypto as a concept will probably not be Bitcoin, Ethereum but something else. Still, we should not forget what is also at play here is political control of citizens. The last thing on the mind of this central bank is investors protection.
You just have to see the historical record of this specific central bank, and their 100% incompetence in protecting these same investors, they so much talk about now, against the past bankruptcy of large Dutch financial institutions.
The Netherlands is currently a healthy democracy, but you just have to look around. The more repressive societies are the most interested in abolishing crypto or forcing citizens to adopt a "specific" digital currency: https://www.wsj.com/articles/china-creates-its-own-digital-c...
> They forget to check the percentage that is taken from their salary contributions, what makes it for the middle class at the same high levels of insurance as in the US.
The Netherlands spends half what the US does per person on healthcare.
Their taxes seem to be middle of pack for europe.
Please provide some citations for the numbers you have cited since at a first approximation they seem to be grossly off.
The Netherlands spends half what the US does per person on healthcare.
Their taxes seem to be middle of pack for europe.
Please provide some citations for the numbers you have cited since at a first approximation they seem to be grossly off.
My core point is that what the central bank is worried about is societal control of a very homogeneous society. Even if currently, a democratic one. The least thing he is worried about is investors as he claimed.
However we can talk a little bit both about overall Dutch TOTAL income burden plus spent on medical care:
Concerning your comment on taxation, I claimed the overall tax burden, is massive not that the income tax for example is the highest in the world. But if you want to talk just income taxation we can start here, and note this is just income tax:
"According to the OECD, the country with the highest national income tax rate is the Netherlands at 52 percent, more than 12 percentage points higher than the U.S. top federal individual income rate of 39.6 percent." https://www.crfb.org/blogs/us-highest-taxed-nation-world
I am sure we can turn this into a smarter discussion than those statistics based discussions. You know, those ones that try to make us believe, living in some Nordic town where it rains most of the time, its cold and you rarely see the Sun has the "happiest" citizens in the world. Or that Zurich or Luxembourg are the best places to live :-))
Concerning your comment around health I presume you are talking overall spent on citizen care. If the Netherlands spends half of what the US does per person on healthcare that, frankly, is an endorsement of the US system and a confirmation of my point. I am amazed the Netherlands spends that much.
Let me explain with some examples: The US habit of suing everybody, forces medical professionals/hospitals to spend a lot of money on very high liability insurance. This is something that almost does not come as a concern in the Netherlands. You can make a claim for medical errors but historically judges are inclined to protect the institutions as they do not have or cannot have high liability insurance: https://www.houthoff.com/insights/News/Doctor-and-hospital-n...
Also, you might know or not, in the Netherlands, the medical system and medical professional will regularly refuse or make it incredibly difficult to get access to standard procedures. I mean procedures that most industrialized nations consider standard levels of care.
This frequently comes as a shock for medical professional from other countries or making the post-graduation at Dutch medical universities.
Massive core effect ? By using these implied quotas, the insurance companies get massive amounts of money but have to spend very little. Some of these privatized health insurance companies make more money than some banks ! "Profits skyrocket at 85 Dutch healthcare firms" https://nltimes.nl/2019/09/25/profits-skyrocket-85-dutch-hea...
This is the reason why Dutch healthcare always comes up in regularly in the news as "Best in the World". It is sometimes used in the US as an example to follow by proponents of socialized medical care. I wish they would look a little bit at the details.
The citizens pay a massive amount mandated by law, but private health insurance companies save a massive amount of money. So again, I am surprised, if it is as you stated the costs are half of the US. As any Dutch residents present in this forum will confirm, here are some examples of expensive medical procedures. Expensive procedures the health insurance companies are likely to avoid due to Dutch medical culture.
- Dutch women will typically have birth at home or are strongly pressed to have babies at home. It is common to hear from Dutch doctors and I am not making this up: "You are pregnant not sick". I am not dismissing the benefits of child birth as they have positive aspects, but try to suggest a child birth to a German, French or British doctor an see as their eyebrows raise ....Again massive saving for the Insurance company. Side comment: guess where that family who does not pay taxes had all their babies ? At the hospital of course :-)
- The amount of pre-natal controls and checks are maybe one or two before a birth. Hospital births are only for exceptional cases or after you strongly insists with their GP. There goes another massive saving for the insurance company and a massive increase in risk for the insured citizen.
- Contrarily to most countries in Europe, unless you have a serious conditions very few women regularly are encouraged to see, or allowed by their GP to regularly see a Gynecologist. As these are very expensive specialist again massive savings for the insurance companies.
I could go on all day, but it was more about the central bank driving motives than the Dutch medical system.:-) I offer you here, a small data point from somebody used to a different, and cheaper, level of care: https://www.findingdutchland.com/magic-talking-dutch-doctors...
However we can talk a little bit both about overall Dutch TOTAL income burden plus spent on medical care:
Concerning your comment on taxation, I claimed the overall tax burden, is massive not that the income tax for example is the highest in the world. But if you want to talk just income taxation we can start here, and note this is just income tax:
"According to the OECD, the country with the highest national income tax rate is the Netherlands at 52 percent, more than 12 percentage points higher than the U.S. top federal individual income rate of 39.6 percent." https://www.crfb.org/blogs/us-highest-taxed-nation-world
I am sure we can turn this into a smarter discussion than those statistics based discussions. You know, those ones that try to make us believe, living in some Nordic town where it rains most of the time, its cold and you rarely see the Sun has the "happiest" citizens in the world. Or that Zurich or Luxembourg are the best places to live :-))
Concerning your comment around health I presume you are talking overall spent on citizen care. If the Netherlands spends half of what the US does per person on healthcare that, frankly, is an endorsement of the US system and a confirmation of my point. I am amazed the Netherlands spends that much.
Let me explain with some examples: The US habit of suing everybody, forces medical professionals/hospitals to spend a lot of money on very high liability insurance. This is something that almost does not come as a concern in the Netherlands. You can make a claim for medical errors but historically judges are inclined to protect the institutions as they do not have or cannot have high liability insurance: https://www.houthoff.com/insights/News/Doctor-and-hospital-n...
Also, you might know or not, in the Netherlands, the medical system and medical professional will regularly refuse or make it incredibly difficult to get access to standard procedures. I mean procedures that most industrialized nations consider standard levels of care.
This frequently comes as a shock for medical professional from other countries or making the post-graduation at Dutch medical universities.
Massive core effect ? By using these implied quotas, the insurance companies get massive amounts of money but have to spend very little. Some of these privatized health insurance companies make more money than some banks ! "Profits skyrocket at 85 Dutch healthcare firms" https://nltimes.nl/2019/09/25/profits-skyrocket-85-dutch-hea...
This is the reason why Dutch healthcare always comes up in regularly in the news as "Best in the World". It is sometimes used in the US as an example to follow by proponents of socialized medical care. I wish they would look a little bit at the details.
The citizens pay a massive amount mandated by law, but private health insurance companies save a massive amount of money. So again, I am surprised, if it is as you stated the costs are half of the US. As any Dutch residents present in this forum will confirm, here are some examples of expensive medical procedures. Expensive procedures the health insurance companies are likely to avoid due to Dutch medical culture.
- Dutch women will typically have birth at home or are strongly pressed to have babies at home. It is common to hear from Dutch doctors and I am not making this up: "You are pregnant not sick". I am not dismissing the benefits of child birth as they have positive aspects, but try to suggest a child birth to a German, French or British doctor an see as their eyebrows raise ....Again massive saving for the Insurance company. Side comment: guess where that family who does not pay taxes had all their babies ? At the hospital of course :-)
- The amount of pre-natal controls and checks are maybe one or two before a birth. Hospital births are only for exceptional cases or after you strongly insists with their GP. There goes another massive saving for the insurance company and a massive increase in risk for the insured citizen.
- Contrarily to most countries in Europe, unless you have a serious conditions very few women regularly are encouraged to see, or allowed by their GP to regularly see a Gynecologist. As these are very expensive specialist again massive savings for the insurance companies.
I could go on all day, but it was more about the central bank driving motives than the Dutch medical system.:-) I offer you here, a small data point from somebody used to a different, and cheaper, level of care: https://www.findingdutchland.com/magic-talking-dutch-doctors...
I see you have moved the goalposts and have not bothered to actually provide any citations for the numbers from your original posted.
Your own link indicates that Netherlands taxes are only slightly above average for OECD countries given their GDP. This would indicate that your original claims were false.
The reason why health care costs are lower is a different topic. Your original claim about relative healthcare costs was clearly false.
Your own link indicates that Netherlands taxes are only slightly above average for OECD countries given their GDP. This would indicate that your original claims were false.
The reason why health care costs are lower is a different topic. Your original claim about relative healthcare costs was clearly false.
And you are sticking to tables of income and tax rates and claiming that income tax is 51% not 80 or 85%. At the same you decide to ignore my claim was the overall earning you do over you life will be taken away by the state. Surely you can understand the concept of overall tax burden.
Although I am simplifying here and not making payroll salary calculation you certainly understand the example like this one.
You earn 4000 EUR salary.A very good manager level salary in the Netherlands. Before you get your salary on your hands the state, takes you 51% so you receive 1960 EUR on hands. ( This example is not 100% correct as it is a progressive tax, but lets run with it for the sake of example)
From these 1960 EUR you will pay, for a monthly health insurance for a family of three 300 to 350 EUR ( typical) so you are left with 1610 EUR. If you have a modest sized car you are paying 133 EUR per month on average per road tax and overall 80 EUR per month on car insurance. For every kilometer that you drive you are paying a tax on your fuel that is 70 to 80% of your fuel cost as road tax. Remember road maintenance and all those state benefits were supposed to be paid from the 51% of you already provided to the state.
Assuming no kilometres driven,while your car sits idle,you are now down to 1397 EUR. Now despite the fact that you already paid to the state 51% they want nothing to do with your water, electricity, garbage collection. For that your local taxes will take you on average another 150 EUR per month, depending on were you live so you are now down to 1247 EUR. We are not done yet because, do you have a dog ? You have to pay tax on it: https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/...
Note from these 1247 EUR will be paying VAT at 21% to live. Do you need an Internet connection and some studies for improvement ? Take another 100 EUR per month to out you at 1100 EUR. If you save any money you will have to pay tax on that. Its called the "Taxation on income from savings and investments" In the Netherlands is based on the assumption that people will have a certain taxable return on their net capital. The actual level of return (for example interest, dividend, capital gains or losses) is NOT relevant. No concern if the bank is ( at it is the case at the moment) providing you with a negative interest rate.
If from the 500 to 600 EUR you will be left to live, you somewhow are able to accumulate any assets dont worry the state will take you remaining in inherithance tax. Here the rates for 2021: https://www.belastingdienst.nl/wps/wcm/connect/nl/erfbelasti...
Believe or no, there are are other taxes, but now I got tired of writing and I want reiterate my point. There is a Massive overall tax burden of the lifetime of a citizen and frankly the only reason people do not protest is, as I stated that you are either on the side of the receiving state benefits sad misery or middle class enjoying your stated super "high quality of life.". It is certainly much better than undeveloped countries but that is also another discussion and also moving the goal posts...Overall tax burden is my concern here.
Although I am simplifying here and not making payroll salary calculation you certainly understand the example like this one.
You earn 4000 EUR salary.A very good manager level salary in the Netherlands. Before you get your salary on your hands the state, takes you 51% so you receive 1960 EUR on hands. ( This example is not 100% correct as it is a progressive tax, but lets run with it for the sake of example)
From these 1960 EUR you will pay, for a monthly health insurance for a family of three 300 to 350 EUR ( typical) so you are left with 1610 EUR. If you have a modest sized car you are paying 133 EUR per month on average per road tax and overall 80 EUR per month on car insurance. For every kilometer that you drive you are paying a tax on your fuel that is 70 to 80% of your fuel cost as road tax. Remember road maintenance and all those state benefits were supposed to be paid from the 51% of you already provided to the state.
Assuming no kilometres driven,while your car sits idle,you are now down to 1397 EUR. Now despite the fact that you already paid to the state 51% they want nothing to do with your water, electricity, garbage collection. For that your local taxes will take you on average another 150 EUR per month, depending on were you live so you are now down to 1247 EUR. We are not done yet because, do you have a dog ? You have to pay tax on it: https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/...
Note from these 1247 EUR will be paying VAT at 21% to live. Do you need an Internet connection and some studies for improvement ? Take another 100 EUR per month to out you at 1100 EUR. If you save any money you will have to pay tax on that. Its called the "Taxation on income from savings and investments" In the Netherlands is based on the assumption that people will have a certain taxable return on their net capital. The actual level of return (for example interest, dividend, capital gains or losses) is NOT relevant. No concern if the bank is ( at it is the case at the moment) providing you with a negative interest rate.
If from the 500 to 600 EUR you will be left to live, you somewhow are able to accumulate any assets dont worry the state will take you remaining in inherithance tax. Here the rates for 2021: https://www.belastingdienst.nl/wps/wcm/connect/nl/erfbelasti...
Believe or no, there are are other taxes, but now I got tired of writing and I want reiterate my point. There is a Massive overall tax burden of the lifetime of a citizen and frankly the only reason people do not protest is, as I stated that you are either on the side of the receiving state benefits sad misery or middle class enjoying your stated super "high quality of life.". It is certainly much better than undeveloped countries but that is also another discussion and also moving the goal posts...Overall tax burden is my concern here.
You can do all the back of the napkin math you want, that still isn't a citation. I have seen too much bad back of the napkin math where small under/overestimations add up to numbers that don't actually match reality.
> And you are sticking to tables of income and tax rates and claiming that income tax is 51% not 80 or 85%. At the same you decide to ignore my claim was the overall earning you do over you life will be taken away by the state. Surely you can understand the concept of overall tax burden.
I was looking at the numbers from the other page that you posted that showed that the TOTAL tax burden at ALL levels of government vs GPD was ~36% which was slightly higher than the OECD average which was 34%. That places it in the middle of the pack for Europe.
> And you are sticking to tables of income and tax rates and claiming that income tax is 51% not 80 or 85%. At the same you decide to ignore my claim was the overall earning you do over you life will be taken away by the state. Surely you can understand the concept of overall tax burden.
I was looking at the numbers from the other page that you posted that showed that the TOTAL tax burden at ALL levels of government vs GPD was ~36% which was slightly higher than the OECD average which was 34%. That places it in the middle of the pack for Europe.
You're listing car and dog like it's some kind of requirement. I couldn't be less happy to live in a society that has less dogs and less cars.
And your comment shows exactly the attitude this tax policy is supposed to inspire. Why do anything or have anything, you do not need it.
I believe it was in the republic of Plato. There is some comment about how in ancient Greece, Slaves used to complain a lot about how severe their Master was, or praise the Master by how friendly it was to them. However they never complained about slavery itself...
I believe it was in the republic of Plato. There is some comment about how in ancient Greece, Slaves used to complain a lot about how severe their Master was, or praise the Master by how friendly it was to them. However they never complained about slavery itself...
> The Netherlands is a country that keeps its citizens under a tax slavery, that will make sure 80 to 85 % of all income you earn over the course of your lifetime will be taken away.
This is flamebait and wrong. Their tax rates range from 37% to 49% which is not far off the United States 40% or so for combined local, state, and federal taxes and add the cost of healthcare (which is included in those Dutch taxes, at half the total cost as the US system).
This is flamebait and wrong. Their tax rates range from 37% to 49% which is not far off the United States 40% or so for combined local, state, and federal taxes and add the cost of healthcare (which is included in those Dutch taxes, at half the total cost as the US system).
I talked about overall tax burden (what really matters) not income tax. And my core point was, I repeat, the central bank wants control and the least thing in his mind is investors protection.
But on the side of taxes here is the Dutch position... "Which countries tax their citizens the most?" https://www.weforum.org/agenda/2019/11/income-tax-around-the...
Factor the famous Dutch fuel and road taxes ( not included), factor you do not have, as I stated, the levels of benefits compared to a Sweden or Denmark and tell me if its a great position to be in...
But on the side of taxes here is the Dutch position... "Which countries tax their citizens the most?" https://www.weforum.org/agenda/2019/11/income-tax-around-the...
Factor the famous Dutch fuel and road taxes ( not included), factor you do not have, as I stated, the levels of benefits compared to a Sweden or Denmark and tell me if its a great position to be in...
Your link shows 51% - are we to believe the average Dutch person spends 30% of their income on road & fuel taxes?
Now, you can say you get fewer benefits and that’s valid but it’s a far cry from 80% or using the word slavery to describe one of the highest quality of life countries in the world.
Now, you can say you get fewer benefits and that’s valid but it’s a far cry from 80% or using the word slavery to describe one of the highest quality of life countries in the world.
Fiat is valuable because of a never ending torrent of positive exposure https://Bitcoin.isNot.Money/
I was happily surprised to see someone proposing this, assuming it was about PoW when reading the headline... but unfortunately it's just someone trying to time the market on our behalf?! Like, should we also ban stock trading when we expect the next pandemic or .com bubble?
Try steelmanning it. Their argument is that crypto is as worthless as an investment with Bernie Madoff. Therefore, the Netherlands should exit early so its citizens aren’t left holding the bag.
That’s their claim to argue against.
That’s their claim to argue against.
It's basically if you've ever read about MMM[1] and thought: Why didn't the government do anything? That's the kind of thought process they are likely in.
Of course in my opinion Madoff & MMM are fundamentally different than cryptocurrencies[2] because there isn't someone at the top who can hide what is happening or issue new coins. Arguably what is happening with Tether might be similar, but that's a very specific thing that you try to target with government intervention instead of blanket banning.
[1]: https://en.wikipedia.org/wiki/MMM_(Ponzi_scheme_company)
[2]: to be clear there are ponzi/madoff schemes in crypto, plenty actually, but if you weight by retail exposure to them they are not that common
Of course in my opinion Madoff & MMM are fundamentally different than cryptocurrencies[2] because there isn't someone at the top who can hide what is happening or issue new coins. Arguably what is happening with Tether might be similar, but that's a very specific thing that you try to target with government intervention instead of blanket banning.
[1]: https://en.wikipedia.org/wiki/MMM_(Ponzi_scheme_company)
[2]: to be clear there are ponzi/madoff schemes in crypto, plenty actually, but if you weight by retail exposure to them they are not that common
Steelmanning. Nice, learned something. I like it.
I think their argument is that cryptocurrencies not just (PoW) but (PoS) too are just a meme with no social benefit (unlike the stock market), yet people put large amounts of money on them and it will end in tears.
I mean, this type of thinking was applied to the early internet as well. “No one will ever buy anything over the internet, people want stores!”
The same lack of imagination is leading to most of these takes.
The same lack of imagination is leading to most of these takes.
Except the fundamentals of the Internet were sound and scalable: near instant global communication and commerce. Cyroptocoin fundamentals don't offer much (any?) value over digitized fiat systems once externalities are considered.
> Cyroptocoin fundamentals don't offer much (any?) value over digitized fiat systems once externalities are considered.
If I'm not mistaken, Bitcoin whitepaper was originally about easy P2P payments. Bitcoin has not full-filled this vision yet, but the cryptosphere as a whole is working on this (if you ignore the hype and speculation).
Visa/Mastercard, PayPal, banks can block or prohibit any kind of transactions if they wish so.
Look up stories of sex workers, OnlyFans creators etc about being banned from using these traditional payments systems.
Also look up fees that some banks charge for remittances - those range from 1.5 to 12% of the amount [1], depending where you're sending it. This does not include the cost of getting a bank account and a debit/credit card in those countries. Receiving a SWIFT transfer may be an issue if you don't have the necessary documents that explain why you have received the money.
PayPal actually does not even support most of the worlds countries. If you're writing a book you want to sell online, but Paypal doesn't support your country - you will NOT be able to get the money out of the publishing platform (gumroad [2], if you need an example). People are excluded from the creator economy.
Banks in developing countries use legal workarounds to get more fees from merchants using their systems or pay terminals. Merchants often have no choice but to raise prices, accept cash only or use some other kinds of P2P solutions.
And don't get me started on the absolutely insane inheritance taxes in some countries - the state is effectively robbing people (and their descendants) after their death.
[1] https://remittanceprices.worldbank.org/en
[2] https://help.gumroad.com/article/223-payoneer-and-gumroad
If I'm not mistaken, Bitcoin whitepaper was originally about easy P2P payments. Bitcoin has not full-filled this vision yet, but the cryptosphere as a whole is working on this (if you ignore the hype and speculation).
Visa/Mastercard, PayPal, banks can block or prohibit any kind of transactions if they wish so.
Look up stories of sex workers, OnlyFans creators etc about being banned from using these traditional payments systems.
Also look up fees that some banks charge for remittances - those range from 1.5 to 12% of the amount [1], depending where you're sending it. This does not include the cost of getting a bank account and a debit/credit card in those countries. Receiving a SWIFT transfer may be an issue if you don't have the necessary documents that explain why you have received the money.
PayPal actually does not even support most of the worlds countries. If you're writing a book you want to sell online, but Paypal doesn't support your country - you will NOT be able to get the money out of the publishing platform (gumroad [2], if you need an example). People are excluded from the creator economy.
Banks in developing countries use legal workarounds to get more fees from merchants using their systems or pay terminals. Merchants often have no choice but to raise prices, accept cash only or use some other kinds of P2P solutions.
And don't get me started on the absolutely insane inheritance taxes in some countries - the state is effectively robbing people (and their descendants) after their death.
[1] https://remittanceprices.worldbank.org/en
[2] https://help.gumroad.com/article/223-payoneer-and-gumroad
That's a good point about banks fleecing people for remittances. Still, that's a political problem which doesn't outweigh the downsides of DeFi today, IMO. Maybe you're correct that other coins will find a sweet spot. But I suspect the politics cannot be bypassed forever, no matter what the medium of exchange.
> And don't get me started on the absolutely insane inheritance taxes in some countries - the state is effectively robbing people (and their descendants) after their death.
There is a balance here too. When the wealthy can shop for tax and wealth havens until (almost) nothing is ever returned, they essentially rob the communities that supported and made them rich in the first place.
> And don't get me started on the absolutely insane inheritance taxes in some countries - the state is effectively robbing people (and their descendants) after their death.
There is a balance here too. When the wealthy can shop for tax and wealth havens until (almost) nothing is ever returned, they essentially rob the communities that supported and made them rich in the first place.
Perhaps they still remember the Tulip Mania that started there
Do you consider the fact that some people get really hurt by bubbles?
But, like, the reason they lose money is because they invest what they can't stand to lose. If you want to solve that problem, then pass a law that banks should stop transactions to investment platforms if the person has less than an average monthly income's worth of money on their account (to be clear, I'm not in favor of that, just that this would solve the issue you're seeing without the guesswork of timing a bubble). Telling the whole world "btw this bubble might burst" isn't going to protect your citizens better than anyone else, especially not the gambling types that get hurt by these sorts of events.
Yeah, there is no good solution. But there is something that stinks about all this and ought to be addressed. I believe something like BTC aid incompatible with anything close to a real time market. It should be large block trades only. The supply of this thing is digitally constrained. The owners are unknown. How do we know this think isn’t in a perpetual pump-and-dump cycle? This is what it looks like.
Governments should step in. If the only way to buy it is to commit to holding it for a while or to buy it in large blocks then maybe we wouldn’t get the kind of market we have today. One that is hurting lots of people.
Governments should step in. If the only way to buy it is to commit to holding it for a while or to buy it in large blocks then maybe we wouldn’t get the kind of market we have today. One that is hurting lots of people.
It makes a lot of sense for a country that has significant portions of its territory below sea level.
But, I wonder. For years I was absolutely baffled by how the world decided to ignore crypto environmental footprint.
Then, out of the blue, a few months ago, it looks like EVERYBODY is talking about it.
Then, the G-7 wants to impose the beginning of a global tax regime upon the developed nations (that's what it is basically).
Doesn't it smell funny?
He cites: "citing fraud, criminal use, and financial instability" - not environmentalism.
Also, that argument only applies to PoW coins, not PoS coins.
Also, that argument only applies to PoW coins, not PoS coins.
PoW - proof of work (computationally intensive), https://en.m.wikipedia.org/wiki/Proof_of_work
PoS - proof of stake, https://en.m.wikipedia.org/wiki/Proof_of_stake
PoS - proof of stake, https://en.m.wikipedia.org/wiki/Proof_of_stake
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The "nobody visibly cared, then some people cared more loudly, then everyone cared" pattern exists in essentially everything.
Climate change, opioid addiction, police murders, genocide in China, microplastics, childhood obesity, #metoo, whatever other thing.
That's just how society works. There are a billion different things happening every day, at any given moment some are gaining attention and some are losing attention. Everybody will care about the most popular one for a while, some laws might get passed or someone might go to jail or get elected or give a speech, and then it'll fade from the mainstream news and daily conversation will move on to the next issue.
This isn't some coordinated conspiracy, this is the pattern of how literally every issue ebbs and flows in attention.
Climate change, opioid addiction, police murders, genocide in China, microplastics, childhood obesity, #metoo, whatever other thing.
That's just how society works. There are a billion different things happening every day, at any given moment some are gaining attention and some are losing attention. Everybody will care about the most popular one for a while, some laws might get passed or someone might go to jail or get elected or give a speech, and then it'll fade from the mainstream news and daily conversation will move on to the next issue.
This isn't some coordinated conspiracy, this is the pattern of how literally every issue ebbs and flows in attention.
The reason this pattern is so common is that most people take their cues for what to care about from the media, and the media take their cues from a presumably small and difficult-to-identify group of thought leaders (some combination of editors, PR firms and people with extremely respectable positions).
It is basically a self organising system around a very small pool of original thoughts. It is pretty remarkable how stuff can completely slip the general discourse because it never catches on in the in-group.
It is basically a self organising system around a very small pool of original thoughts. It is pretty remarkable how stuff can completely slip the general discourse because it never catches on in the in-group.
That describes what I think about current public discourse exactly. I wonder if that's how it's always been with human societies?
The misallocation of resources into crypto mining also now has real-world implications. GPUs and other chips being unavailable, for example.
apparently ripple (xrp) is behind the fud campaign against POW, which is why we've seen such an uptick in negative news against it recently
>"Cryptocurrencies are essentially neither money nor a financial product, but an example of what Nobel laureate Robert Shiller calls a 'contagious narrative': a contagious story in which people believe because other people believe in it."
How is this different from money or the financial markets? Why do those continue to exist if not for the belief we collectively have in them? And why is that only a problem for bitcoin?
How is this different from money or the financial markets? Why do those continue to exist if not for the belief we collectively have in them? And why is that only a problem for bitcoin?
> How is this different from money or the financial markets?
A big difference is that the sovereign requires you to pay taxes in a given currency at the threat of punishment. So long as everyone needs to pay the taxman, the currency that the tax man accepts is gonna have at least some value.
A big difference is that the sovereign requires you to pay taxes in a given currency at the threat of punishment. So long as everyone needs to pay the taxman, the currency that the tax man accepts is gonna have at least some value.
Only to the tax man...
There have been and still are(?) economies where the local currency was only used for 'official' business, and most trade was carried out in another, more stable currency.
There have been and still are(?) economies where the local currency was only used for 'official' business, and most trade was carried out in another, more stable currency.
Because the Netherlands make significant money from funnelling money to their tax havens. If people can do it themselves with bitcoin, how are these tax-pros supposed to live? /s
"Hasekamp stated that several countries took steps to curb cryptocurrencies [...] The Netherlands is lagging behind. "
It seems like The Netherlands would be the first western country to do so.
https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country...
It seems like The Netherlands would be the first western country to do so.
https://en.wikipedia.org/wiki/Legality_of_bitcoin_by_country...
So wait ... this guy wants 2 things:
1) banning bitcoin
2) massive money injections into Dutch companies, Dutch government, and "in between" (ie. private companies in e.g. healthcare that effectively work exclusively for government). He has an article on how "basically every last Dutch political party wants a massive increase in spending" ( https://www.cpb.nl/column-een-ruk-aan-het-stuur )
And with Bitcoin his main argument is that it may present the government with even more debt (no explanation as to why a crash in Bitcoin would increase the Dutch government's debt burden)
However the last of his problems with Bitcoin is very out of step with the other ones: "financial instability". He is afraid, in other words, of the effect of Bitcoin's existence on the currencies he (helps) control. NOT of it's effect on people (it would be very weird of the "government bank" (that's what CPB is) to care about the effect of anything on people. That is very much not his job).
So the obvious explanation for this combination of behaviors is simple: he wants to use Dutch (or European) funds that aren't his (say pension funds, perhaps even savings accounts) for government policy, and is afraid of Bitcoin providing a way out of his measures. He is afraid of a massive RISE in Bitcoin, not a drop. He wants to safeguard his ability to take extreme measures (like confiscating things) to make massive government spending possible. That must mean concrete plans exist.
So I would say this guy is on the philosophical side of the Bitcoin "lunatics". He's just on the other side of the battle, and afraid of the effect on his own policies. He is afraid of the protection that Bitcoin offers.
1) banning bitcoin
2) massive money injections into Dutch companies, Dutch government, and "in between" (ie. private companies in e.g. healthcare that effectively work exclusively for government). He has an article on how "basically every last Dutch political party wants a massive increase in spending" ( https://www.cpb.nl/column-een-ruk-aan-het-stuur )
And with Bitcoin his main argument is that it may present the government with even more debt (no explanation as to why a crash in Bitcoin would increase the Dutch government's debt burden)
However the last of his problems with Bitcoin is very out of step with the other ones: "financial instability". He is afraid, in other words, of the effect of Bitcoin's existence on the currencies he (helps) control. NOT of it's effect on people (it would be very weird of the "government bank" (that's what CPB is) to care about the effect of anything on people. That is very much not his job).
So the obvious explanation for this combination of behaviors is simple: he wants to use Dutch (or European) funds that aren't his (say pension funds, perhaps even savings accounts) for government policy, and is afraid of Bitcoin providing a way out of his measures. He is afraid of a massive RISE in Bitcoin, not a drop. He wants to safeguard his ability to take extreme measures (like confiscating things) to make massive government spending possible. That must mean concrete plans exist.
So I would say this guy is on the philosophical side of the Bitcoin "lunatics". He's just on the other side of the battle, and afraid of the effect on his own policies. He is afraid of the protection that Bitcoin offers.
Use the archive link for this article instead (the site is a dumpster fire of ad and tracker shit): https://archive.is/oBQre
Bans are totally justified. They will achieve two major outcomes:
1. Tank the price, thus freeing up energy and advanced manufactured goods (which are in shortages right now) for proper productive use.
2. Significantly lessen the instances of Ransomware, since companies will have no legal mechanism to actually pay.
Whether the coins continue to exist informally and are traded in some kind of primitive barter system is irrelevant.
1. Tank the price, thus freeing up energy and advanced manufactured goods (which are in shortages right now) for proper productive use.
2. Significantly lessen the instances of Ransomware, since companies will have no legal mechanism to actually pay.
Whether the coins continue to exist informally and are traded in some kind of primitive barter system is irrelevant.
As long as we're banning things we should also ban all videogames, they are too addictive. There is nothing more precious than time and it can be spent much more productively.
And alcohol for obvious reasons.
And alcohol for obvious reasons.
The difference being that the harm caused by Bitcoin (or at least the negative effects pointed out by GP) is externalized from the investors to society as a whole.
everything is externalized. you don’t live in a bubble. You are part of a ecosystem with your I/O connected to that system.
Thats another industry that uses lots of energy for something with no tangible value.
Will the same people asking to ban cryptocurrencies be content with it or will they move towards banning other unapproved energy consumption activities?
Will the same people asking to ban cryptocurrencies be content with it or will they move towards banning other unapproved energy consumption activities?
Both also use a lot of energy themselves.
> 2. Significantly lessen the instances of Ransomware, since companies will have no legal mechanism to actually pay.
That sounds backwards. I'd rather have hospitals and companies learn some hard lesson in cybersecurity through the threat of cryptocurrency-enabled ransomware than banning a medium of exchange altogether. Finally people are starting to care about backups and best practices.
That sounds backwards. I'd rather have hospitals and companies learn some hard lesson in cybersecurity through the threat of cryptocurrency-enabled ransomware than banning a medium of exchange altogether. Finally people are starting to care about backups and best practices.
As long as ransomware is possible, it will continue. Criminals will come with a way to be paid, and some of those ways would involve some level of physical violence and organized armed intermediates.
Besides the ledger of all transactions are totally in the public. Which means that anyone could trace any transaction.
yup. also we’ll end covid, catch all the people involved in human trafficking, give everyone free clean water, free organic food, free internet and a free tesla. climate change? gone. everyone’s IQ is gonna increase by 120 points. We’re gonna develop space technology that will put us on another habitable planet, outside of the solar system before the end of the decade!!!
next time you think a ban is a good thing, imagine I would ban something you do. It doesn’t even have to be something essential. Maybe I ban a hobby of yours. How does that feel?
next time you think a ban is a good thing, imagine I would ban something you do. It doesn’t even have to be something essential. Maybe I ban a hobby of yours. How does that feel?
Of course not, meme currency will do that! Look how much good did it bring, all those GPU shortages, all the wasted electricity.
> He believes that a crash of cryptocurrencies is unavoidable and that the Netherlands should act as soon as possible.
How would he know and who is he to tell me what to do with my money? His other reasons are sound but that is just stupid. Don't patronize me by deciding what risks I'm allowed to take or act like you know something the rest of us don't.
How would he know and who is he to tell me what to do with my money? His other reasons are sound but that is just stupid. Don't patronize me by deciding what risks I'm allowed to take or act like you know something the rest of us don't.
So this pretty much came out of the blue.
The Netherlands has been a pretty good place for cryptocurrencies. Not actively promoting them like some places but also not actively campaigning against it like others and the taxes on it are light.
It needs to be mentioned that the CPB head is saying this as a personal opinion, so it has people wondering what his agenda is.
The Netherlands has been a pretty good place for cryptocurrencies. Not actively promoting them like some places but also not actively campaigning against it like others and the taxes on it are light.
It needs to be mentioned that the CPB head is saying this as a personal opinion, so it has people wondering what his agenda is.
this is a bunch of bs if you ask me. in today’s world everyone is an expert in everything.
you can’t have X! Why? It’s for your own protection!!!1
what about Y? this looks bad and should also maybe be banned? no, no, no. you don’t understand this stuff. there’s reasons and people’s livelihoods depend on it and pepe silva.
Look at drugs. You have alcohol which by any measures is bad that’s widespread and people do dumb stuff while on it all the time. Ban it? Nah fam, it’s just good fun. And people enjoy it and it doesn’t hurt anyone, right? RIGHT?
And you have “hard drugs” that are bad for ya and you’ll end up doing hard time if you ever get caught remotely near it. It’s for your own PROTECTION!!!1
you can’t have X! Why? It’s for your own protection!!!1
what about Y? this looks bad and should also maybe be banned? no, no, no. you don’t understand this stuff. there’s reasons and people’s livelihoods depend on it and pepe silva.
Look at drugs. You have alcohol which by any measures is bad that’s widespread and people do dumb stuff while on it all the time. Ban it? Nah fam, it’s just good fun. And people enjoy it and it doesn’t hurt anyone, right? RIGHT?
And you have “hard drugs” that are bad for ya and you’ll end up doing hard time if you ever get caught remotely near it. It’s for your own PROTECTION!!!1
How?
100% tax on crypto-to-fiat transactions? National firewall inspecting traffic for numerically-low hashes? Police kicking down doors of suspected miners, looking for GPUs? Something else? I'm sympathetic to some of the reasons, but isn't the devil sort of in the details here?
100% tax on crypto-to-fiat transactions? National firewall inspecting traffic for numerically-low hashes? Police kicking down doors of suspected miners, looking for GPUs? Something else? I'm sympathetic to some of the reasons, but isn't the devil sort of in the details here?
The same way monero is banned in Australia - you don't allow exchanges to offer it to your citizens, and for them to cash it out. This can't stop everyone but as exchanges require KYC for cash deposits/withdraws it can curb the majority of the usage especially for speculation purposes. For a US example, look at how binance.com is banned in the US and imagine the same but for every exchange.
If anything banning all of crypto is easier than banning a specific crypto and payment operators are pretty friendly to LE.
If anything banning all of crypto is easier than banning a specific crypto and payment operators are pretty friendly to LE.
Of course not: if you are fined heavily if you use them, most people won't use them and that's it. Follow the crypto through the chain and if it seems to originate from you, you pay 100x whatever is in the address. Or jail if you cannot pay that. Would work no? You do not need technical measures if you are a resident of a country. But you catch them at the point of conversion to fiat. And then it becomes too much risk and hassle.
I think it would weaponize blockchain: the fact you can be lifted from your bed in 20 years for an illegal transaction because it is on the chain would be enough for most to never touch it.
I think it would weaponize blockchain: the fact you can be lifted from your bed in 20 years for an illegal transaction because it is on the chain would be enough for most to never touch it.
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Nobel laureate Robert Shiller calls bitcoin a 'contagious narrative'
Anyone else find articles like these hard to take seriously?
Anyone else find articles like these hard to take seriously?
Nobel laureate Robert Shiller should have a conversation with Turing Award winner Silvio Micali.
I usually stop reading when people start throwing around "big" names in an argumentativw essay. This time I disagreed so heartily that I finished reading.
Are you convincing me of a nobel laureates opinion, or are you convincing me that bitcoin is bad for The dutch economy.
I think he's just an integrated buerocrat trying to make his way in the world.
The comments said enough about this.
Are you convincing me of a nobel laureates opinion, or are you convincing me that bitcoin is bad for The dutch economy.
I think he's just an integrated buerocrat trying to make his way in the world.
The comments said enough about this.
I feel the same way every time someone references Paul Krugman. The man is so often wrong and yet still revered by the press because he once won a "Nobel Memorial Prize in Economic Sciences", which isn't even an actual Nobel Prize.
> Nobel laureate...
Maybe we should start taking reputable people like this more seriously.
Maybe we should start taking reputable people like this more seriously.
The "Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel" is not a Nobel Prize.
https://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Econom...
As the name implies, it is a prize created in "honor of" Nobel by the Swedish central bank. As such, there is an inherent ideological bias. Many would dispute the claim that it is "reputable".
Shiller is famous for suggesting that consumers don't actually know what is good for them, while the state supposedly has better information about appropriate consumption habits. He also misappropriated the word "Phishing" in this context.
https://cdn.mises.org/Review%20Essay%20Phishing%20for%20Phoo...
https://en.wikipedia.org/wiki/Nobel_Memorial_Prize_in_Econom...
As the name implies, it is a prize created in "honor of" Nobel by the Swedish central bank. As such, there is an inherent ideological bias. Many would dispute the claim that it is "reputable".
Shiller is famous for suggesting that consumers don't actually know what is good for them, while the state supposedly has better information about appropriate consumption habits. He also misappropriated the word "Phishing" in this context.
https://cdn.mises.org/Review%20Essay%20Phishing%20for%20Phoo...
Another buerocrat?
Could a powerful country just take over Bitcoin as an extension of its fiat?
What would happen if tomorrow the federal reserve announced it will exchange 1 BTC for 50000 USD?
Obviously there would be an immediate price spike... but then what?
What would happen if tomorrow the federal reserve announced it will exchange 1 BTC for 50000 USD?
Obviously there would be an immediate price spike... but then what?
> what would happen
cybercrime would skyrocket
cybercrime would skyrocket
Why? Genuine question.
Also say hi to Warren for me
Also say hi to Warren for me
Reasoning seems strange. All thing financial can crash. It is more about control
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Ironically this is exactly why it has value to begin with.
…
Nobody buys tulips anymore