Comment: Responses

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Thank you for your replies.

Yes, but the body that makes the decision is all the users, merchants and miners using the currency. You need a supermajority of all those to agree for any such change.

I acknowledged the fact that the decision is made by the entire body, the question was why would we assume that body has a zero inflation mentality, when the dominant monetary theories hold to an greater than zero ideal inflation rate? Especially if CC is a mainstream phenomenon which serves the entire market economy, why assume a zero inflation commitment when the main schools of monetary thought today advocate positive inflation? Are we not sneaking in ideological assumptions into the future of cryptocurrencies that aren't warranted? Remember, bitcoin users will be not just savers, speculators and heterodox early adopters, but vendors and sellers of goods, and people with an overall interest in a healthy economy. Just like the banks, corporations and governments of today.

Well, the Constitution says only congress can actually mint gold/silver coins. States can't do that.

That's hardly relevant, the point is precisely that even the USG reserved for itself the right to mint coins as currency. My question was why would governments permit the flourishing of cryptocurrencies to the point of displacing sovereign state currencies? Where is the political calculus that leads from BTC technology to the state abdicating its monetary prerogative? If gold was more widespread, more international, and more understood and cherished by liberty loving individuals, and government banned its use as money, why would CCs fare better?

Private individuals/institutions are able to I believe (I may be wrong), but it can't be money confused with the federally minted money. Private coins would also be subject to shaving/filling etc. which has often been a problem with gold/silver as physical currency.

I believe you are wrong in the sense that, when coins were actually the money before fiat, governments jealously guarded access to minting. Now that they've demonetized precious metals, people may be able to issue round pieces of gold, but they are subject to sales and cap gains tax, can't discharge tax liabilities, are not required to be accepted in payment of private debts, etc. So my point was that when gold was money, the government controlled it, and now that paper is money, the state does not allow banks to issue competing private paper money. You bring up scrip and barter but that's not really the same thing. It can't be used to pay taxes; it isn't legal tender; states and localities don't tax in it; fed member banks don't deal in it, etc. It isn't competition to the state, and if any of it went widespread it would be squashed.

Also my point about free banking not being permitted was simply that just like minting gold or issuing paper money, banking is guarded state territory, and god forbid BTC ever became widely used, do you really think the state would not grab a hold of and regulate the supply of that CC that formed the basis of an active deposit banking system serving consumers? They would be political constituents demanding deposit insurance, bank guarantees, reserve regulation, capital requirements on BTC financial institutions, etc.

There was no restriction (that I know of) on issuing private money. That's even done today. People use frequent flyer miles, store gift certificates, LETS barter system points and more as money to some limited extent.

If you think there's no restriction on issuing private money, try it sometime. Try running business where you issue bank notes backed by capital assets, whether gold or anything else, and people use your paper notes as currency. Try running a bank outside the regulatory framework. Pointing to some corporations use of FFM or other small scale rewards type money or Mickey mouse money, which is really just loyalty reward type stuff that always is counted in dollars, has no bearing on whether the government will allow freedom in competing currencies on a scale that would threaten its monopoly on currency issuance and the predominance of its own fiat currency in national commerce.

Because that would be tantamount to the state openly saying it was operating as a totalitarian dictatorship.

Not exactly, but if it was, it has no problem doing so with dollars, legal tender laws, the Fed, taxation, etc. I don't see your email parallel as making sense. The government does have a sort of monopoly on mail delivery, but I don't see why or how it would be threatened or care about email. But if email effected the economy the way money does, it would be child's play for a motivated government to whip the public up against private email just as they did and do with unregulated banking or gold money.

No, because Bitcoin is a global currency. Political happenings in the U.S. probably wouldn't persuade users, merchants, and miners in the rest of the world to raise the limit.

Gold was a global currency, much more widespread and central to the world economy than bitcoin, more widely understood and distributed, and more ingrained in the fabric of national and global economies. My point about how gold was confiscated in 33 is unrefuted, and why bitcoin would be less prone to confiscation or prohibition than gold is unanswered.

Lots of my other original questions were never replied to, or if they were they were replied to misunderstood or out of context, quoted without the very context and background I applied to them. Sometimes you answered my questions with points I had already addressed in setting the original questions up, and so didn't reply to my actual point.

For example, I carefully defined what I mean by end user, and laid out why BTC has so few end users as I defined them, relative to users overall. You simply responded

No. It has by now very many end users and growing end uses.

without any specifics or details. You left the question open despite superficially answering. The point remains very few BTC holders or users use it for a final purchase that BTC handles better than dollars. The market is very limited for real end demand, with the majority vending for BTC to get dollars, or speculating for dollars. Prices swing wildly and are set each day to meet the dollar market value, never a BTC value.

You forget again that Bitcoin is global, but government jurisdiction is limited.

No I don't. Gold was global, it hardly stopped national governments from seizing control of currency.

What nations are embracing bitcoin as a currency, as you claim? Where is bitcoin treated as a currency by the government, where it can be deposited in existing financial institutions, is not taxed as sales or cap gains, can be used to discharge taxes in lieu of national government currency, or can be used to pay private debts without legal tender applying? where do banks lend or make market in BTC? Nowhere.

If governments are lenient in some places its simply because BTC is not regarded as a currency or as a threat to established fiat currency.

Well banning it would be as effective as banning drugs/alcohol etc. Taxing it is welcome. Confiscating it is difficult for feds if they are stored correctly.

The government is extremely effective in banning gold as currency, and enforcing taxes, and legal tender. Corporations and businesses follow those laws. The fact that there is a large underground drug market is no argument that law abiding persons would use bitcoin if it were not legally allowed. Drug use is very limited, everyone uses money. Foremost, banks and big corporations and the entire govt civil service, military etc. have to use money as provided by govt, and all pay taxes in federal currency.

You claim the free market will sort out issues of BTC banking. The point was not that the market wasn't capable of doing so, it is that the market in lending and trading is highly regulated and subject to the Fed and all kinds of other federal regulation. If BTC were to be adopted or included as currency, it would become FED regulated and part of the overall banking system. Monetary policy would then determine its supply, not free choices.