Why do so many Libertarians support bitcoins?

[dannno]

Even dollars are backed by paper and oil.

As well as death and maiming.

 

[dannno]

A true libertarian currency or trading system should have something of backing. Maybe one alternative would be to find a way to hold stock securities off shore and find an easy/secure way to transfer them without any world governments knowing.

Having something back your digital currency when that thing can be stolen is a liability. In that sense bitcoin is more secure than a gold backed digital currency. Gold and silver have their advantages, bitcoin has its advantages. They are both good to have, and they can both be used as a tool to overcome monetary tyranny.

Edit: I believe stock securities are regulated by the government.

 

[specsaregood]

Gold has industrial uses and can be used for jewelery. If Gold was valued at $0/oz, I could still use it for these purposes. That can not be said for bitcoin at all as there is no fundamental purpose for having a bitcoin. It is the ultimate ponzi scheme, just like dollars.

I think that is where you are wrong, is not bitcoins intrinsic value its ability to offer privacy in transactions but at the same time easy to transfer. Paper dollar transactions can offer privacy, but they aren't easy to transfer securely, remotely

 

[newbitech]

Why is this? Bitcoins are an unstable, fiat currency so why support something open to manipulation?

Why? A rising tide lifts all boats.

Bitcoin is fiat? Don't you mean "fiat money"? Sure, it's fiat. If you use a really broad definition fiat, then computing in general and specifically the internet is also "fiat". To describe Bitcoin as "fiat" in that sense, you'd only be describing the protocol and not the actual monetary functionality. In other words Bitcoin protocol is fiat but Bitcon does not function as fiat money in the economy. Similarly, gold minting can be described as "fiat", or a formal authorization or proposition for creating coins to be used as money.

I think the use of the term "fiat" to describe Bitcoin is an appeal to emotion argument that attempts to pit libertarian value of free market money at odds with fiat money. The correct term that libertarians are in opposition to is fiat money, or money that is non-convertible "legal tender" especially when that "legal" authority is anything but legal, aka USD and the US FED.

Bitcoin is unstable? Metaphor, Bitcoin is as unstable as a baby learning to walk. Why buy 2 year old Johnny as baseball glove? Look at him, he has no coordination and stumbles all over the place, he's never gonna make it to the big leagues!

Folks that are using Bitcoin do so knowing that in the early adoption phase there are going to be swings in the fiat money exchange rate. This is true with the adoption of any thing into mainstream acceptance, and should not come as a surprise or deter anyone from being interested or even getting involved. If you look at the price history of Bitcoin, the exchange rate has had 3 distinct spikes. each spike representing a wider adoption rate, basically more users. It's economics 101 increase demand, limited supply. What happens? "Price" increases.

Open to manipulation? What exactly do you mean by "open"? Anything can be manipulated. I don't read anything you have said to indicate why Bitcoin is more "open" than anything else to manipulation.

Anyways, I think Bitcoin is a pretty good example of what the free market can come up with on it's own without government intervention. Here is a currency that is clearly filling a niche with the prospect to expand into other previously 3rd party fiat dominated niches. Think paypal, western union, all the various "internet" currencies that already exist.

You don't have to be of any sort of political or philosophical persuasion to see how this type of technological advancement can be quickly adopted and assimilated into the wider globalization of the communication infrastructure.

Plus, there is so much more that Bitcoin can do that hasn't even been tapped in to yet. It's role as a currency isn't even the most valuable property of the protocol. Once the other uses are discovered and hooked in to, wider adoption will be encouraged. Take a look at the Namecoin protocol to see some of the more interesting ideas that cryptographic proof of work type protocols are able to implement.

An honest technological comparison of emerging cryptocurrency technology as money to the standard fair government fiat money debt paradigm (whether backed by something hard or not) will reveal that it is the latter system that suffers traumatically from lack of stability and manipulation.

Free market FTW!

 

[Quark]

Gold has industrial uses and can be used for jewelery. If Gold was valued at $0/oz, I could still use it for these purposes. That can not be said for bitcoin at all as there is no fundamental purpose for having a bitcoin.

Yet this isn't what makes gold useful as money.

 

[PaulConventionWV]

Gold has industrial uses and can be used for jewelery. If Gold was valued at $0/oz, I could still use it for these purposes. That can not be said for bitcoin at all as there is no fundamental purpose for having a bitcoin. It is the ultimate ponzi scheme, just like dollars.

A true libertarian currency or trading system should have something of backing. Maybe one alternative would be to find a way to hold stock securities off shore and find an easy/secure way to transfer them without any world governments knowing.

*sigh*

The idea that bitcoin is a ponzi scheme has been refuted on here time and time again, over and over and yet people like you STILL bring it up. What is wrong with you? Get it through your brain what the definition of a ponzi scheme is.

Also, most of gold's value is based on its demand as a form of currency. Sure, it can be used for jewelry and a few other things, but not many people would actually use it for that. If that was all the value was based on, it would be a lot lower than it is now. The rest of its value comes from its demand as a medium of exchange.

 

[Crystallas]

Why do so many libertarians support hypertext transfer?

 

[FrankRep]

*sigh*

The idea that bitcoin is a ponzi scheme has been refuted on here time and time again, over and over and yet people like you STILL bring it up. What is wrong with you? Get it through your brain what the definition of a ponzi scheme is.

Maybe this is more fitting.


Ponzi scheme > Similar schemes

An economic bubble: A bubble is similar to a Ponzi scheme in that one participant gets paid by contributions from a subsequent participant (until inevitable collapse). A bubble involves ever-rising prices in an open market (for example stock, housing, or tulip bulbs) where prices rise because buyers bid more because prices are rising. Bubbles are often said to be based on the "greater fool" theory. As with the Ponzi scheme, the price exceeds the intrinsic value of the item, but unlike the Ponzi scheme, there is no single person misrepresenting the intrinsic value.

 

[Seraphim]

At this point, mostly death and maiming.

As well as death and maiming.

 

[PaulConventionWV]

Maybe this is more fitting.


Ponzi scheme > Similar schemes

An economic bubble: A bubble is similar to a Ponzi scheme in that one participant gets paid by contributions from a subsequent participant (until inevitable collapse). A bubble involves ever-rising prices in an open market (for example stock, housing, or tulip bulbs) where prices rise because buyers bid more because prices are rising. Bubbles are often said to be based on the "greater fool" theory. As with the Ponzi scheme, the price exceeds the intrinsic value of the item, but unlike the Ponzi scheme, there is no single person misrepresenting the intrinsic value.

In other words, it's NOTHING like a ponzi scheme. So just stop using that hyperbolic shtick. No market bubble can be compared to a Ponzi scheme. They're completely different concepts.

 

[Tod]

Bitcoins are not a fiat currency. Fiat currency is created by a government (by fiat). I think libertarians like Bitcoins because they have been created privately. That being said I don't think Bitcoins are going to last because they fail a critical test of money, they are not a good store of value.

Also I have a hunch that many supporters of Bitcoin are also anarchists.

Bitcoin has the potential for many desirable properties that precious metals lack. The big thing is that bitcoin is just starting out while gold has an extensive history. Do you suppose that gold was any more stable in value than bitcoin when it was first discovered and used?

Bitcoin does have a big obstacle to overcome: the transition from "investment" to the development of its practical desirable use as currency. The frenzy over buying it in order to see its value increase and then selling to reap those gains is doing two things: drawing attention to it (pro) and causing a lot of volatility (long term con).

The best thing, imo, to ensure the long term success of bitcoin is to actually USE it to buy and sell goods and services and to use the blockchain for the broader things it is capable of as a public record of ownership.

 

[squarepusher]

OK here is another question, Bitcoins is a digital currency, existing on the internet. Who owns the internet? Mostly governments or private corporations.

 

[FrankRep]

Gary North:

Bitcoins are anti-Austrian to the core. The fact that libertarian utopians do not see this indicates that they have never understood Mises or Austrian capital theory. This is not surprising. They do not even understand Leonard Read's "I, Pencil."​

Ouch. Slam.

 

[dannno]

Gary North:

Bitcoins are anti-Austrian to the core. The fact that libertarian utopians do not see this indicates that they have never understood Mises or Austrian capital theory. This is not surprising. They do not even understand Leonard Read's "I, Pencil."​

Ouch. Slam.

Alternatively, Gary North is the one that lacks understanding on this topic.

 

[Tod]

OK here is another question, Bitcoins is a digital currency, existing on the internet. Who owns the internet? Mostly governments or private corporations.

Yes, it seems as though most BTC people poo-poo that, saying that the web can never be shut down because it would be too devastating to the world economy. I agree with Ann Barnhardt (see Danke's post http://www.ronpaulforums.com/showthread.php?435102-Crazy-Woman-Calmly-Discusses-Bitcoins ) in that regard. However, unlike Ann, I think BTC can still provide a valuable service and has a place, provided one does not put all your eggs in the BTC basket.

 

[heavenlyboy34]

Why do so many libertarians support bitcoin?

Because they have all fooled themselves into thinking bitcoin has value in of itself. Once people realize this pos digital nothingness was just wished into existance by man, it will go down to the zero it was meant to be at. Sure you can transfer/store/divide/transact with bitcoins with extreme ease, but what does that mean if it has no value in of itself?

For the programmers out there, the true justification for bitcoin's value is a recursive function where the end base case is $.0000000000001. Somehow, I am supposed to believe that something valued at virtually 0 is supposed to become the rock that I store my family's wealth in?

Nothing has value "in and of itself". See my recent thread about "intrinsic value". Value is subjective.

 

[vickersvimy]

Nothing has value "in and of itself". See my recent thread about "intrinsic value". Value is subjective.

Yes but physical objects such as gold have value because of what you can make them into as well as being a good store of value. Gold can be used for jewelry and wiring. Bitcoin cannot.

 

[Neil Desmond]

Yes but physical objects such as gold have value because of what you can make them into as well as being a good store of value. Gold can be used for jewelry and wiring. Bitcoin cannot.

You can also make jewelry and wiring from other material that's not so expensive. It costs about $1,250 for an ounce of 0.999 pure gold, but it only costs around 20 cents for an ounce of copper. If gold or any other metal has "intrinsic" value because it can be used for wiring, then the maximum "intrinsic" value would amount to no more than 20 cents per ounce.

Gold has the expense of having to physically store it, protect it, transport it, etc. How do those expenses match up to that 20 cents? Gold is a good, and bitcoin is tantamount to a service (i.e., the payment processing aspect), what's the "intrinsic" value of its built in service, and the fact that it doesn't have to be physically stored, protected, transported, etc?

The scarcity level of gold is not only unknown and not fixed (e.g., gold mined from asteroids), but it can even be created synthetically. We also can't predict the scarcity level of gold. Bitcoin, on the other hand, has a fixed limit, and it is known what the number of bitcoins in circulation is at any point in the future.

Jewelry doesn't even have to be made out of metal, and what function or purpose does jewelry serve that cannot be achieved by very inexpensive materials?

 

[vickersvimy]

You can also make jewelry and wiring from other material that's not so expensive. It costs about $1,250 for an ounce of 0.999 pure gold, but it only costs around 20 cents for an ounce of copper. If gold or any other metal has "intrinsic" value because it can be used for wiring, then the maximum "intrinsic" value would amount to no more than 20 cents per ounce.

Gold has the expense of having to physically store it, protect it, transport it, etc. How do those expenses match up to that 20 cents? Gold is a good, and bitcoin is tantamount to a service (i.e., the payment processing aspect), what's the "intrinsic" value of its built in service, and the fact that it doesn't have to be physically stored, protected, transported, etc?

The scarcity level of gold is not only unknown and not fixed (e.g., gold mined from asteroids), but it can even be created synthetically. We also can't predict the scarcity level of gold. Bitcoin, on the other hand, has a fixed limit, and it is known what the number of bitcoins in circulation is at any point in the future.

Jewelry doesn't even have to be made out of metal, and what function or purpose does jewelry serve that cannot be achieved by very inexpensive materials?

The function of jewelry is to look nice. You are essentially saying that buying a product to look nice serves no function.
Besides bitcoin isn't backed by anything. Even the dollar is backed by oil. Bitcoins also are being bought not to secure wealth but based on the "greater fool" theory.

 

[Neil Desmond]

The function of jewelry is to look nice.

I know that. I didn't ask what function does jewelry serve, and you didn't answer my question. I'll try again (it's basically the exact same wording): what function or purpose does jewelry serve that cannot be achieved by very inexpensive materials?

You are essentially saying that buying a product to look nice serves no function.

Nope, I am not saying anything of the sort (essentially or otherwise).

Besides bitcoin isn't backed by anything.

Actually, it's backed by something more than gold is backed by something. I somewhat touched on this, and if you look at my other posts, in other threads where I discuss bitcoin, you'll find that in one of them I discuss more extensively and in depth what gives both bitcoin as well as gold their so-called "intrinsic" value.

Even the dollar is backed by oil.

I'm not sure what you're referring to, here. What we use are Federal Reserve Notes (FRNs); they're backed debt, and are the product of an interest-bearing fractional reserve system.

Bitcoins also are being bought not to secure wealth but based on the "greater fool" theory.

That depends on who's buying bitcoins and why. They're being used as medium of exchange by many people.

The "greater fool" theory also applies to gold: http://newsok.com/taking-stock-greater-fool-theory-governs-price-of-gold/article/3861757