Key Post Bitcoin is a clearly identifiable economic bubble

[Duke of Marmalade]

If or when this happens, surely anyone holding bitcoin will be left with a digital currency that no one wants or needs to use ?

My understanding is that a central bank digital currency is nothing more than ordinary folk being able to have their current accounts with the CB. As it is, most of us use the commercial banks for our digital currency. (I haven't spent a real penny in weeks). Don't understand why they need any development work. It would be a fairly fundamental change to the monetary system. For example it would remove a source of funding for the commercial banks with big implications for the economy.
This is not at all a threat to bitcoin. Bitcoin set out to be decentralised and censor free, obviously CBDC is not that. But that was a long time ago. For many years now bitcoin has been a speculative bauble. A CBDC has no speculative value.

 

[tecate]

My understanding is that a central bank digital currency is nothing more than ordinary folk being able to have their current accounts with the CB.

Yes, of course - it's a soft cuddly puppy. lol

It puts the ability of government and central bankers to manipulate money into overdrive. Someone's wealth could be switched on or off in an instant. A time limit could be put on money - spend it or lose it. They can program in the ability to dictate where it can be spent and on what.
A true statist like Duke believes thats perfectly fine. Anyone with a grain of sense would not provide them with this power - when there's no earthly need to give it to them.

This is not at all a threat to bitcoin. Bitcoin set out to be decentralised and censor free, obviously CBDC is not that. But that was a long time ago. For many years now bitcoin has been a speculative bauble. A CBDC has no speculative value.

That was a long time ago? Ah, so it lost its decentralized and censorship resistant properties recently did it?
CBDC is a variation of the original 5hItcoin -> fiat money.

 

[Duke of Marmalade]

Ah! The cult FUD in mega overdrive.

It puts the ability of government and central bankers to manipulate money into overdrive.

Yes.

Someone's wealth could be switched on or off in an instant.

Really? In any case how much of a person's wealth would be in a CB current account?

A time limit could be put on money - spend it or lose it.

I think you a very distorted view of the role of money in society. It is a vehicle for day to day spending. It has a very limited timespan in people's portfolio thinking. Anybody with any wealth to spare over day to day monetary requirements will not have it locked up in money.

They can program in the ability to dictate where it can be spent and on what.

What has that got to do with CBDC. Governments can in theory do whatever they want. And indeed there are restrictions on what you can spend money on. I agree that those who wish to indulge in illegal transactions will have nothing to do with CBDC.

A true statist like Duke believes thats perfectly fine. Anyone with a grain of sense would not provide them with this power - when there's no earthly need to give it to them.

The malevolent powers which you refer to are already available to governments. In some way which I do not fully follow you see CBDC as giving these powers to central banks which would not be democratically accountable. Maybe you have spent a bit too much time in parts where the rule of law the pursuit of the common good is a bit of a joke.

That was a long time ago? Ah, so it lost its decentralized and censorship resistant properties recently did it?

Cheap shot. You know what I meant. Of course its intrinsic nature has not changed but its utility these days is almost entirely speculative.

 

[tecate]

Ah! The cult FUD in mega overdrive.

Somebody calling you out on your misdirection more like.

Really? In any case how much of a person's wealth would be in a CB current account?

How much of people's money could be held in a government issued digital wallet? In many cases, the vast majority of their net worth.

I think you a very distorted view of the role of money in society. It is a vehicle for day to day spending. It has a very limited timespan in people's portfolio thinking. Anybody with any wealth to spare over day to day monetary requirements will not have it locked up in money.

Its you that has the distorted view. How many people on the planet do you imagine to be investing in "portfolio thinking". Most of them would have no notion what the hell you're talking about.
Secondly, you're trying to justify that optionality. In no way is that level of manipulation - putting an expiry date on money - acceptable. And they WILL use it. Keynesian economics 101 - spending needed to fuel the beast.

What has that got to do with CBDC. Governments can in theory do whatever they want. And indeed there are restrictions on what you can spend money on. I agree that those who wish to indulge in illegal transactions will have nothing to do with CBDC.

It has EVERYTHING to do with a CBDC, because using the technology in this manner opens up that level of monetary manipulation to them. I wasn't talking about illegal transactions - it can go much further than that.

The malevolent powers which you refer to are already available to governments. In some way which I do not fully follow you see CBDC as giving these powers to central banks which would not be democratically accountable. Maybe you have spent a bit too much time in parts where the rule of law the pursuit of the common good is a bit of a joke.

Thats not true. Can the government determine what I spend the cash in my wallet on right now? Can they program the money in your bank account to expire at 3pm on Friday?
On the nonsense about spending time in parts of the world other than IRL, this discussion in no way is confined to your experience in Ireland. Why would it be? Bitcoin is global. The development of CBDCs is happening on a global basis.

Cheap shot. You know what I meant. Of course its intrinsic nature has not changed but its utility these days is almost entirely speculative.

No cheap shot at all. Don't misdirect/mislead. And you're wrong on the "entirely speculative" claim (for the nth time). Name me an asset caught up in a "speculative bubble" that has inflated and deflated around 6 times over the course of its existence - and no longer exists.

 

[NoRegretsCoyote]

He certainly has omitted the un-censorable transactioning component of crypto from his definition of resilience.

Certainly useful if you are money laundering or wholesaling illegal drugs or weapons.

 

[tecate]

Certainly useful if you are money laundering or wholesaling illegal drugs or weapons.

Something thats achieved via fiat money already. Other than that, you're assuming that everything illegal is wrong - it's not.

You think that capital controls (which are employed in various countries around the globe) are in the interests of the individual? You think its wrong that people have an option to retain money that can't simply be stolen from them (holding $ with a financial institution)? You think its wrong that people in places that suffer hyper inflation or otherwise wayward inflation decide to opt for a decentralized currency that cant be inflated away?

 

[NoRegretsCoyote]

Something thats achieved via fiat money already.

Yes, but with much greater difficulty and that's feature, not a bug.

Other than that, you're assuming that everything illegal is wrong - it's not.

Indeed, but it's a good proxy. There is nothing in my life that I need crypto for that I can't do with fiat money.

You think that capital controls (which are employed in various countries around the globe) are in the interests of the individual?

Capital controls have (in certain circumstances) economic benefits.

You think its wrong that people in places that suffer hyper inflation or otherwise wayward inflation decide to opt for a decentralized currency that cant be inflated away?

There are maybe 5% of people in the world who are impacted by hyperinflation. I wish it was 0% of course but this can be achieved via sensible monetary policy involving a fiat currency - most of the world figured out how to do it decades ago. If you gave me absolute power over the Zimbabwean money supply I could get inflation down to single digits in two years.

Crypto advocates tout this bizarre collection of unrelated benefits and are utterly deaf to the risks.

 

[jman0war]

So basically cyptos are super bad, except for the ones that Central Banks are copying and pasting.

 

[Duke of Marmalade]

How much of people's money could be held in a government issued digital wallet? In many cases, the vast majority of their net worth.

I really don't know what you are talking about.
Money is not an asset. The average wealth in Ireland is €230,000. Currently I suggest no more than 2k of that is held in M1 or M2. Why would anybody hold any more than that - not only earning zero interest but eroded by inflation (I think you are on record as saying money is vulnerable to inflation). So you think that Central Banks hold such sway over folk that if they introduce a digital wallet (whatever that is) that they will pile everything into this non interest bearing inflating "asset". That's not the way things happen in these parts.

 

[tecate]

Yes, but with much greater difficulty and that's feature, not a bug.

Except that's not actually true. In the case of cash, its truly untraceable. We've had law enforcement - including a former head honcho in the FBI - tell us that BTC is a dream due to public network traceability.
In terms of banking, plebs deal with the friction of all this KYC/AML nonsense (and it IS nonsense - no doubt the majority of AAMers agree with the weaponization of money but I certainly don't!). Those that operate at a higher level either pay cents on the dollar to launder via banking system collaborators - or they simply have all the resources in the world to game the system.
HSBC custom designed the cash boxes in their Mexican banks a few years ago - because the existing boxes weren't big enough for all the money that was being laundered. It was one instance of laundering on epic proportions. Now, tell me which banker spent a day in jail for that? I'll wait.
The rest of them are quite happy to pay cents on the dollar - as the cost of doing business - in fines related to AML/KYC breaches. Those fines - based on banking behaviour over recent years go into trillions.

Indeed, but it's a good proxy. There is nothing in my life that I need crypto for that I can't do with fiat money.

That old chestnut. I couldn't give a fiddlers about your comfy Irish existence. You lot are not representative of the entire planet. Other than that, following many years of stability, people get complacent. Nothing ever stays the same. Bitcoin will exist and be available to you if you do need it (to rule that out is foolish).

Capital controls have (in certain circumstances) economic benefits.

I don't think you want to go down this road. By and large, capital controls as they exist in the world today screw the individual over in an effort to prop up a mismanaged state/central bank/central bank currency.

There are maybe 5% of people in the world who are impacted by hyperinflation. I wish it was 0% of course but this can be achieved via sensible monetary policy involving a fiat currency - most of the world figured out how to do it decades ago. If you gave me absolute power over the Zimbabwean money supply I could get inflation down to single digits in two years.

See above and your comfy existence. You're referring to hyper inflation. What of wayward inflation? Is inflation of 10 or 20% ok then in your book? To me, it's theft.

Crypto advocates tout this bizarre collection of unrelated benefits and are utterly deaf to the risks.

The deafness is in the other direction. If you guys were right, BTC would have been dead and burried by now. All through these discussions, it has only been gaining a greater hold while you guys insist its vaporware.

 

[tecate]

I really don't know what you are talking about.
Money is not an asset. The average wealth in Ireland is €230,000. Currently I suggest no more than 2k of that is held in M1 or M2. Why would anybody hold any more than that - not only earning zero interest but eroded by inflation (I think you are on record as saying money is vulnerable to inflation). So you think that Central Banks hold such sway over folk that if they introduce a digital wallet (whatever that is) that they will pile everything into this non interest bearing inflating "asset". That's not the way things happen in these parts.

Now you're just arguing the ridiculous. If that was the case, there would never be cases of folks losing their life savings when banks have just disappeared. The current classic example being Lebanon. You want to tell the folks that had to "rob" the banks in order to try and get their own bloody money back? There have been multiple instances of that in the past 18 months or so.

You don't know what a digital wallet is? How do you think a central bank is going to get plebs to use a retail CBDC on a daily basis unless they issue them with a digital wallet?

 

[Duke of Marmalade]

Now you're just arguing the ridiculous. If that was the case, there would never be cases of folks losing their life savings when banks have just disappeared. The current classic example being Lebanon. You want to tell the folks that had to "rob" the banks in order to try and get their own bloody money back? There have been multiple instances of that in the past 18 months or so.

You don't know what a digital wallet is? How do you think a central bank is going to get plebs to use a retail CBDC on a daily basis unless they issue them with a digital wallet?

It is you who has gone even more ridiculous than I have seen you before. This is my last word on this rabbit hole. You said that CBDC will lead to ordinary people being exposed to having the vast bulk of their wealth confiscated. Being able to hold money (and I mean money, day to day spending) directly with the Central Bank rather than indirectly through the commercial banks does not increase this exposure one wit. If Central Banks were as wicked as you say they are or as they may be in your parts they could collapse the system within an hour if they were so inclined. Why wait for digital wallets?

 

[tecate]

It is you who has gone even more ridiculous than I have seen you before. This is my last word on this rabbit hole. You said that CBDC will lead to ordinary people being exposed to having the vast bulk of their wealth confiscated. Being able to hold money (and I mean money, day to day spending) directly with the Central Bank rather than indirectly through the commercial banks does not increase this exposure one wit. If Central Banks were as wicked as you say they are or as they may be in your parts they could collapse the system within an hour if they were so inclined. Why wait for digital wallets?

A retail CBDC will involve the issuance of a digital wallet by the central bank/government. How else do you think they're going to get people actively using a retail CBDC?

Its programmable money - and while Bitcoin is programmed with decent intentions, a retail CBDC likely won't be. And we will end this here - i'm not going round in circles with you on this either. The fact is that most sane people accept that retail CBDCs are a danger. If you don't want to accept that reality - and want to give the government and central bankers powers over your money that they simply don't need, that's totally up to you. I'm 1000% against such an idea.

 

[Duke of Marmalade]

and want to give the government and central bankers powers over your money that they simply don't need, that's totally up to you. I'm 1000% against such an idea.

Power over my money?! My money currently consists of €55 in notes and €6.30c in coin in my pocket plus €small in an AIB current account backed by Central Bank reserves. I can tell you now that if the Central Bank offered their digital wallet I would probably switch my AIB current account into it. Why on earth would I want to put any more into a non interest bearing, purchasing power decreasing wallet? Are you sure you know what you are talking about?

 

[tecate]

Power over my money?! My money currently consists of €55 in notes and €6.30c in coin in my pocket plus €small in an AIB current account backed by Central bank reserves. I can tell you now that if the Central Bank offered their digital wallet I would probably switch my AIB current account into it. Why on earth would I want to put any more into a non interest bearing, purchasing power decreasing wallet? Are you sure you know what you are talking about?

And right here we have the issue. You only consider your own experience - and that's not representative of everyone else on the planet. Were most people to hear you mention the word "portfolio" they wouldn't have an iota of what you're talking about. There are many ways in which substantial funds could end up in a CBDC. Government takes in $ through taxes. They inefficiently dole it out in other ways - and in the cases where that's doled out to someone's CBDC wallet - with strings attached (you must use it in X days, etc. or it must be spent here, not there, on this, not that), you may think that's a good thing. I certainly don't.

Besides that, how are you assuming that other products wont be built on top of that retail CBDC? And when that happens, WHO has direct control over that network and that currency? Any and all manner of manipulation can take place at that point.

 

[Duke of Marmalade]

And right here we have the issue. You only consider your own experience - and that's not representative of everyone else on the planet. Were most people to hear you mention the word "portfolio" they wouldn't have an iota of what you're talking about. There are many ways in which substantial funds could end up in a CBDC. Government takes in $ through taxes. They inefficiently dole it out in other ways - and in the cases where that's doled out to someone's CBDC wallet - with strings attached (you must use it in X days, etc. or it must be spent here, not there, on this, not that), you may think that's a good thing. I certainly don't.

Besides that, how are you assuming that other products wont be built on top of that retail CBDC? And when that happens, WHO has direct control over that network and that currency? Any and all manner of manipulation can take place at that point.

I think I have rubbished your claim that CBDC is the fast track to wicked Central Banks "switching people's wealth off in an instant".

 

[tecate]

I think I have rubbished your claim that CBDC is the fast track to wicked Central Banks "switching people's wealth off in an instant".

I'm very confident that you most certainly have not. There's a volume of chatter out there in the ether pointing towards the dangers of a retail
CBDC. However, you can continue to hold your blinkered statist views for as long as you want Duke. I'm not interested in changing your mind.

 

[Duke of Marmalade]

I'm very confident that you most certainly have not. There's a volume of chatter out there in the ether pointing towards the dangers of a retail
CBDC. However, you can continue to hold your blinkered statist views for as long as you want Duke. I'm not interested in changing your mind.

I suggest you should not frequent the ether, wherever it is. Try mainstream commentators.
CBDC is coming. So CBs will start "switching people's wealth off in an instant". Will they do this selectively? Day at the office of a Central Bank. "Hey guys and gals, how about today we switch off the wealth of all dukes, wouldn't that be fun?".

 

[tecate]

I suggest you should not frequent the ether, wherever it is. Try mainstream commentators.

There's plenty of commentary. However, you expect me to present you with a central banker as a source, stating that what central bankers propose to introduce is a societal danger! That's truly ridiculous.

 

[Duke of Marmalade]

There's plenty of commentary. However, you expect me to present you with a central banker as a source, stating that what central bankers propose to introduce is a societal danger! That's truly ridiculous.

You win.