Author Topic: Rand Paul says Bitcoin should be backed by stocks...  (Read 5133 times)

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Offline Mrrr

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I can completely understand his difficulties in accepting that something as contradictory as open source currency can have an intrinsic value. I'm still wondering myself whether this 'crypto revolution' is actually happening or whether it is something that is only happening on some obscure internet fora.

At the same time I'm investing into various crypto initiatives and to be honest the returns make Berkshire Hathaway look like a penny stock.

Too bad I don't have millions at my disposal and have to find comfort in turning a 10$ bill into a 100$ one :)

Offline puppies

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a very common early form of money was butter.  Its hard to produce, easily divisible, compact in relation to value, and likely to be valued by others.   

Early money sprung up out of a need for a common medium of exchange, and was backed by nothing except the belief that others would accept it in payment for their goods and services.

Rand seems to hold the common belief that certain materials are imbued with intrinsic value.  I disagree.  Value is created in the minds of men, and is the product of our wants, needs, and desires. 

In my opinion bitcoin has the same level of counterparty risk as a gold coin.  It is as silly to say that it should be backed by stocks, as it is to say that a gold coin should be backed by stocks.

 +5%

This is absolutely true! Money is therefore an illusion that only works when a critical mass of the population believes that butter, gold coin, or cryptocurrency will be accepted by others.

Wellll then what about sex?  Sexcoin?  If all prostitutes and porn stars bought up sexcoins...and set up exchanges to sell them to the common man, seems like Sexcoin would be the most trustworthy currency out there.  The "critical mass" would never cede!

(sorry, just had to say it) :)

They don't call it the oldest profession for nothing.  If purchasing sex coin was a requirement to have sex with a prostitute, or watch porn, sex coin would be worth a lot more than it is today.

Problem with that is there is no incentive for providers to accept sex coin, as it is two abstraction layers away from any currency that the provider is likely to be able to use to purchase their wants, needs and desires.  (roofer having a leaky roof and all)

 
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Offline fuzzy

a very common early form of money was butter.  Its hard to produce, easily divisible, compact in relation to value, and likely to be valued by others.   

Early money sprung up out of a need for a common medium of exchange, and was backed by nothing except the belief that others would accept it in payment for their goods and services.

Rand seems to hold the common belief that certain materials are imbued with intrinsic value.  I disagree.  Value is created in the minds of men, and is the product of our wants, needs, and desires. 

In my opinion bitcoin has the same level of counterparty risk as a gold coin.  It is as silly to say that it should be backed by stocks, as it is to say that a gold coin should be backed by stocks.

 +5%

This is absolutely true! Money is therefore an illusion that only works when a critical mass of the population believes that butter, gold coin, or cryptocurrency will be accepted by others.

Wellll then what about sex?  Sexcoin?  If all prostitutes and porn stars bought up sexcoins...and set up exchanges to sell them to the common man, seems like Sexcoin would be the most trustworthy currency out there.  The "critical mass" would never cede!

(sorry, just had to say it) :)
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Offline jae208

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a very common early form of money was butter.  Its hard to produce, easily divisible, compact in relation to value, and likely to be valued by others.   

Early money sprung up out of a need for a common medium of exchange, and was backed by nothing except the belief that others would accept it in payment for their goods and services.

Rand seems to hold the common belief that certain materials are imbued with intrinsic value.  I disagree.  Value is created in the minds of men, and is the product of our wants, needs, and desires. 

In my opinion bitcoin has the same level of counterparty risk as a gold coin.  It is as silly to say that it should be backed by stocks, as it is to say that a gold coin should be backed by stocks.

 +5%

This is absolutely true! Money is therefore an illusion that only works when a critical mass of the population believes that butter, gold coin, or cryptocurrency will be accepted by others.
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Offline puppies

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a very common early form of money was butter.  Its hard to produce, easily divisible, compact in relation to value, and likely to be valued by others.   

Early money sprung up out of a need for a common medium of exchange, and was backed by nothing except the belief that others would accept it in payment for their goods and services.

Rand seems to hold the common belief that certain materials are imbued with intrinsic value.  I disagree.  Value is created in the minds of men, and is the product of our wants, needs, and desires. 

In my opinion bitcoin has the same level of counterparty risk as a gold coin.  It is as silly to say that it should be backed by stocks, as it is to say that a gold coin should be backed by stocks.

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Offline fuzzy

Might help if team viral swooped in to fav / RT ;) ;) (search #bitshares)


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Offline Empirical1

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@empirical it works because when a dac creates value it can incentivize people to support it. Those thousands of employees are still there, working independently towards a well defined goal. Just look at bitcoin ecosystem.

Of course some similar positions will still be there and new ones will be created but I'm referring to the thousands of lawyers/accountants/bankers/admin & clerical positions that will be lost. I personally think far less than 50% of the people currently in the occupations I listed will be needed in a DAC counterpart. The Bitcoin ecosystem is a good example of that.

http://en.wikipedia.org/wiki/Stigmergy

http://en.wikipedia.org/wiki/Stigmergy

Quote
The principle is that the trace left in the environment by an action stimulates the performance of a next action, by the same or a different agent.

Yeah that's what I mean when I said - 'similar positions will still be there and new ones will be created'

Are you saying that you disagree with my statement that less than half the amount of accountants/lawyers/Bankers will be needed in a DAC counterpart?

Offline luckybit

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@empirical it works because when a dac creates value it can incentivize people to support it. Those thousands of employees are still there, working independently towards a well defined goal. Just look at bitcoin ecosystem.

Of course some similar positions will still be there and new ones will be created but I'm referring to the thousands of lawyers/accountants/bankers/admin & clerical positions that will be lost. I personally think far less than 50% of the people currently in the occupations I listed will be needed in a DAC counterpart. The Bitcoin ecosystem is a good example of that.

http://en.wikipedia.org/wiki/Stigmergy
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Offline Empirical1

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@empirical it works because when a dac creates value it can incentivize people to support it. Those thousands of employees are still there, working independently towards a well defined goal. Just look at bitcoin ecosystem.

Of course some similar positions will still be there and new ones will be created but I'm referring to the thousands of lawyers/accountants/bankers/admin & clerical positions that will be lost. I personally think far less than 50% of the people currently in the occupations I listed will be needed in a DAC counterpart. The Bitcoin ecosystem is a good example of that.

Offline G1ng3rBr34dM4n

@gingerbreadman Saying bitcoin is backed by math is like saying fiat is backed by paper. The word "backed" is abused so much and means different things to different people... the math is security and implementation. The transaction rules are what make it into things that are valuable.

I think what your analogy describes is the form factor of the currency and that's not what I'm alluding to.  With crypto - you can't remove the security (math) from the transaction rules that allow it to function and expect it to function properly.  Without math, the crypto system would crumble.  Without government, the fiat system would crumble. 

I'll accept its an imperfect analogy, but to your 'average joe', clinging to the idea that currency "must be backed"... I think the analogy provides an initial straw to grasp hold of, and a catalyst to begin thinking about why currency has value and where it comes from.

Offline toast

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@empirical it works because when a dac creates value it can incentivize people to support it. Those thousands of employees are still there, working independently towards a well defined goal. Just look at bitcoin ecosystem.

@gingerbreadman Saying bitcoin is backed by math is like saying fiat is backed by paper. The word "backed" is abused so much and means different things to different people... the math is security and inplementation. The transaction rules are what make it into things that are valuable.

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Offline donkeypong

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Rand Paul seems to take strong positions on issues he doesn't take the time to understand. I'm not eager to see his trigger finger in the White House.

Offline G1ng3rBr34dM4n

Yeah Rand really doesn't get it. He's saying he thinks crypto-currencies like Bitcoin need to be backed by 'something else' to have value.

Agreed.

He doesn't get Crypto-currencies are already shares of a company & that they derive most of their value from their perceived advantages as a form of money. (As well as their perceived future potential.)

YET! ;)

Hopefully he's able (and willing) to evolve his thinking beyond 'stocks' and pivot towards the concept of shares.  I don't think it'd be a far stretch for him to understand, his political background and understanding of Austrian theory should prime his mind.

Yes I think  people will have a much easier time understanding/valuing Bithshares/crypto-equities as shares in profitable blockchain based companies as opposed to pure 'Crypto-currencies.' (Crypto-equities designed to function just as money/currency.)

But the thing I struggled with wrapping my head around the most, is that it just doesn't seem possible/plausible that many of the services offered by Banks/Exchanges/Insurance & Youtube/Itunes type companies that currently require thousands of employees to run can be replaced by some computer code thanks to consensus/blockchain technology. I think the size of companies/industries that are about to be displaced/disrupted is what will take most people by surprise.

To be fair, Bitcoins and Bitshares do have to be backed by something else. But that something else doesn't have to be traditional stocks.

Stocks are backed by the same thing that cryptocurrencies are backed by which is the goods and services offered by the issuer.

So if you're dealing with Bitcoins, Bitshares, or stocks, as long as there are companies willing to accept it, work for it, people willing to accept it or work for it, then it has value.

Bitshares XT is a distributed virtual company so as long as you transact in it's tokens then it's tokens have value.  It does not need the permission of Rand Paul or to be backed by Invictus stock to have value. It already has value today and it's not backed by any stock, and to maintain value it has to remain profitable.

I believe that "something else" can be distilled down to one word: math.

Bitcoin, bitshares, et. al - are backed by math.  A simple and powerful statement.

Offline luckybit

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Yeah Rand really doesn't get it. He's saying he thinks crypto-currencies like Bitcoin need to be backed by 'something else' to have value.

Agreed.

He doesn't get Crypto-currencies are already shares of a company & that they derive most of their value from their perceived advantages as a form of money. (As well as their perceived future potential.)

YET! ;)

Hopefully he's able (and willing) to evolve his thinking beyond 'stocks' and pivot towards the concept of shares.  I don't think it'd be a far stretch for him to understand, his political background and understanding of Austrian theory should prime his mind.

Yes I think  people will have a much easier time understanding/valuing Bithshares/crypto-equities as shares in profitable blockchain based companies as opposed to pure 'Crypto-currencies.' (Crypto-equities designed to function just as money/currency.)

But the thing I struggled with wrapping my head around the most, is that it just doesn't seem possible/plausible that many of the services offered by Banks/Exchanges/Insurance & Youtube/Itunes type companies that currently require thousands of employees to run can be replaced by some computer code thanks to consensus/blockchain technology. I think the size of companies/industries that are about to be displaced/disrupted is what will take most people by surprise.

To be fair, Bitcoins and Bitshares do have to be backed by something else. But that something else doesn't have to be traditional stocks.

Stocks are backed by the same thing that cryptocurrencies are backed by which is the goods and services offered by the issuer.

So if you're dealing with Bitcoins, Bitshares, or stocks, as long as there are companies willing to accept it, work for it, people willing to accept it or work for it, then it has value.

Bitshares XT is a distributed virtual company so as long as you transact in it's tokens then it's tokens have value.  It does not need the permission of Rand Paul or to be backed by Invictus stock to have value. It already has value today and it's not backed by any stock, and to maintain value it has to remain profitable.
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Offline Empirical1

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Yeah Rand really doesn't get it. He's saying he thinks crypto-currencies like Bitcoin need to be backed by 'something else' to have value.

Agreed.

He doesn't get Crypto-currencies are already shares of a company & that they derive most of their value from their perceived advantages as a form of money. (As well as their perceived future potential.)

YET! ;)

Hopefully he's able (and willing) to evolve his thinking beyond 'stocks' and pivot towards the concept of shares.  I don't think it'd be a far stretch for him to understand, his political background and understanding of Austrian theory should prime his mind.

Yes I think  people will have a much easier time understanding/valuing Bithshares/crypto-equities as shares in profitable blockchain based companies as opposed to pure 'Crypto-currencies.' (Crypto-equities designed to function just as money/currency.)

But the thing I struggled with wrapping my head around the most, is that it just doesn't seem possible/plausible that many of the services offered by Banks/Exchanges/Insurance & Youtube/Itunes type companies that currently require thousands of employees to run can be replaced by some computer code thanks to consensus/blockchain technology. I think the size of companies/industries that are about to be displaced/disrupted is what will take most people by surprise.