I understand how there are people looking for sound investments and "puts", but bitcoin and any kind of virtual currency has to be one of the biggest scams in the 21st century. Why do you think its creators stay hidden? (Rhetorical question) The best thing that could happen is all the criminals use it and then their wealth disappears in one night because of any number of practical failures.
Karaoke Vox who created the dollar, yen and remnimbi?
Karaoke Vox Then wrote a lenghty and in depth reply. I'm posting his reply in combination with my reponses interspersed with a change in italics to denote his comments vs mine.
“Samuel P. Chase as Secretary of Treasury designed the first Federal Reserve Note for 1$ He is also a Supreme Court Justice who had to rule on the constitutional legitimacy of issuing paper instead of coin. “
He was responsible for the establishment of a national banking system and the issue of paper currency It not only secured an immediate market for government bonds, but also provided a permanent, uniform and stable national currency. He was the person who ensured that the Union could sell debt (versus existing assets and commodities) to pay for the war effort enabling the first wide scale example of deficit spending in America. This debt was net economically destructive, for the Civil war was not accretive (of course there are other factors that come into play, slavery, struggle for power, etc.). He worked with Jay Cooke & Company to successfully manage the sale of $500 million in government war bonds (known as 5/20s) in 1862. Today’s equivalent would be about $12,203,467,381. Yes, he tied what was essentially early standardized US currency directly to $12 trillion of freshly minted war debt. This debt was circulated through the young US economy through the Greenback demand note. The U.S. government placed the Demand Notes into circulation by using them to pay expenses incurred during the Civil War including the salaries of its workers and military personnel. These notes, which were supposed to represent the IOUs of the borrowings of the US government were signed and countersigned by officials of the US Treasury. These signatory requirements were changed and laxed over time, and more importantly, after redemption it was made legal for the redeemed notes to be reissued to the public without without a refreshed backing of new debt. An individual Demand Note could be re-issued into circulation after it was presented for redemption. This was an early form rehypothecation, of money printing without an explicit mandate. In a math-based system, one a unit of account is removed, it is gone. Bitcoin is tied directly to math, not war, with no political agenda driving it – ex, the ability to autonomously print more in times of need.
Secretary of the Treasury Chase began distributing the notes to meet Union obligations in August 1861. Initially, various merchants, banks and especially the railroad industry accepted the notes at a discounted rate or did not accept them at all. This shows that even government-backed notes carries with it risk and uncertainty, with said uncertainty being quite justified. Secretary Chase issued the following circular to the assistant treasurers to remove all doubt about the monetary status of the new notes:
Under the acts of July 19th and August 5th last, Treasury Notes of the denomination of $5, $10, and $20, have been, and will continue to be issued, redeemable in coin on demand at the offices of the assistant treasurer at Boston, New York, Philadelphia, St. Louis, and at the Depository of Cincinnati. These notes are intended to furnish a current medium of payment, exchange, and remittance, being at all times convertible into coin at the option of holder, at the place where made payable, and everywhere receivable for public dues. They must be always equivalent to gold, and often and for many purposes more convenient and valuable.
A sufficient amount of coin to redeem these notes promptly on demand will be kept with the depositaries, by whom they are respectively made payable. And all depositors and collecting officers will receive them, enter them on their books, and pay them to public creditors as money. Large amounts of the notes of small denominations are rapidly being issued and distributed.
These actions also created a willingness on the part of banks to redeem the notes for coin as well. This put Demand Notes on par with the value and purchasing power of gold coins and they circulated widely among the public for private transactions. They could be redeemed for silver coinage as well. In short, in the early days of US currency, as in now, ephemeral, non-commodity backing of notes of debt are considered as the risk that they are, papers potentially carrying empty promises
This played itself out immediately thereafter…
Suspension of specie payment
The ability of the government to redeem the Demand Notes in specie came under pressure in December 1861. On December 10 Secretary Chase indicated that war expenditures were far exceeding projections while Federal revenues were falling short. Then on the 16th, news of the British reaction to the Trent Affair reached New York and the major banks, which had been supplying gold to the government in exchange for seven-thirties Treasury Notes and bonds which they had been in turn reselling, saw the demand for their offerings of Union securities drop precipitously. By the end of the month the banks had suspended specie payment on their own banknotes. The Demand Notes then began to appear at assistant treasurers' offices in great numbers for redemption, but since the government could not obtain adequate supplies of coin it was forced to follow suit and suspend redeeming the Demand Notes for gold in the first few days of 1862.
Bitcoin is legal because it has been argued in the U.S. that people can form their own contracts using whatever they agree to extinguish debts. I do not have to accept Bitcoin; however, I must accept the U.S. dollar as payment because it is the smallest bank note backed by the Federal Reserve Bank.
You also do not have to accept USD as payment either, contingent upon the terms of the contract. If I enter into a swap with you , US Brent Crude for euros, you cannot offer me USD at settlement. You are oversimplifying things in an effort to prove you point. I believe your point is USD is considered legal tender in the US, but that doesn’t override a contractual agreement, which is the space that Bitcoin currently lives in. In addition, since you are starting this comment off as a currency discussion, it strongly indicates that you don’t know what Bitcoin is. I suggest you read our primer How to Use, Trade, Store and Invest in Bitcoin Digital Assets - Step by Step, Part 1
Bitcoin has been seized as an asset by the courts in Texas because of illegal drug trades on the Silk Road website. How those bitcoins will be used by the gov't is beyond my knowledge just like any other assets that are seized. So you can still try to retrieve your Bitcoin wallet by using the courts system if someone steals it from you *whether you gave it to them or not*.
This part of your comment drives home the point of the video. That asset forfeiture was made possible by the bitcoins being place on a hosted, or otherwise 3rd party controlled device, or left unencrypted. In encrypted form, it would not matter if the assets were found or seized, they would not affect the bearer in any form or fashion as long as he had access to a copy of the assets, which could be anywhere. Thank you for making that point for me.
An additional point is retrieval of the coin. You cannot use a court system to retrieve coin that was stolen from you if you don’t know who stole it, which is often the case with digital theft. Look at the larger incidences of digital theft and then look at the recovery rates – essentially zero, as in absolutely NOTHING!.
· Mt Gox – 850,000 bitcoins, approaching a billion USD at today’s exchange rate. Recovery that I know of, roughly 200,000 (these were “found”, not recovered from theft – likely operational and/or management incompetence). This would not have happened were the coin not left on Mt. Gox servers to begin with.
· Bitfinex was robbed of 119,756 coins, today’s equivalent would be over $120,000,000. It is not known how the hack may have occurred, especially on such a scale, considering Bitfinex’s purported use of cold wallets and two of three multisig, with one key held by 3rd party, Bitgo. It is not, therefore, at all clear how such a staggering amount may have been stolen. They returned roughly 63% immediately from their corporate coffers and issued “IOU” tokens as collateral for the balance, of which I believe ~2% have been redeemed thus far, but I’m not privy to the relevant info. The pertinent point is none of the actual theft has been recovered, just as in Mt. Gox.
· Bitstamp - Hacked for $6 million of coin (today’s prices), but since the hack was hot wallets only, they did not pass the loss onto their customers. Again, a zero known recovery amount.
Long story, short - one would die of asphyxiation waiting for the court system to facilitate the recovery digitally stolen coin, particularly form relatively thinly capitalized operations. A better way of putting this is, “An ounce of prevention is worth a pound of cure!”.
When something...anything...is delegitimized...it creates uncertainty, then chaos like we've seen most recently in Venezuela's poor resource management and India's currency revaluation. U.S. institutions are losing legitimacy because of various corrupt human activities. Instead of calling out the criminals and the criminal activity, the press is playing politics.
Okay, I can’t necessarily disagree with that.
When someone reports something that is false and does not retract the story then they should be fired. Instead of the press posting the mugs of the CEOs/CFOs of the big banks committing fraud, they target what will keep them out of trouble with their financial backers. The press is not beyond the law and they are governed or balanced by laws having to do with libel and slander. They are also bound by ethics in regard to fair and balanced reporting. Just because a man likes to talk big about himself and his achievements (I got a fish this big) does not make him a criminal.
This comment goes way outside the bounds of the video, which addresses the possibility of government censorship, and the censorship-proof abilities of the blockchain, if used correctly. Even though I will likely regret bringing politics in this, even to the smallest degree, let’s address your comment as evidence that the possibility of government censorship is very, very real. You said, “When someone reports something that is false and does not retract the story then they should be fired.” This is true, and it is true for EVERYBODY, not just the media. It is particularly true for the POTUS! Donald Trump has said many things that were not true and has done so repetitively, both throughout his campaign, and throughout his presidency to date. If you truly believe that reporting something false without a retraction should result in firing, then…
Now, let's be real. Politicians say things that aren’t true, and Trump is far from the first and I doubt very seriously if he will be the last. In addition, the media (both mainstream and niche) is biased, and often distorts reality – yes that is true. The media is corporate owned, yes that is true as well, but no less true than corporate ownership in the US cabinet (big banks, big energy, industrialists, billionaires, etc.). What is unique is that the office of the POTUS (the most powerful in the world) is branding the media as the enemy of America. That’s dangerously close to enabling a censorship state. If you can’t see that then your politics are blinding you to obvious facts, and you might as well keep all of your assets in a hosted wallet on someone else’s property. A prudent investor would pay attention and prepare accordingly, regardless of their political affiliation. After al, said political affiliation will not return your assets once they are removed. To put this into a realistic perspective, these are his stated views on civil asset forfeiture (search for the 2nd appearance of the term, "asset") as gleaned from a transcript on the Whitehouse.gov website.
To de-politicize this and attempt to remain objective, if you removed the name Trump, and removed the label of the industry that he is embattled with and swapped them both with generic names, then presented the situation to ten objective, independent people, I can assure you they would nearly all come back with a similar conclusion. Let's put it this way, the British look to be well on their way to doing this already, reference
If this were true, then half of the male population would be in jail, including you Reggie! Thanks for your concerns about censorship, you may censor this entire post if you so choose and I will not think anything bad of you for doing so. It's your channel.
As you can see, in lieu of censoring your comment, I gave it significant exposure – along with a few factual corrections. It is my channel, and I welcome well thought out comments. I don’t need to agree with them, they just need to be professional and respectful.