Slashdot Mirror
Security Breach Forces Bitcoin Bank Inputs.io To Halt Operations
New submitter BitVulture writes "The hardcore Bitcoin community is abuzz with news of the closure of Inputs.io, a supposedly secure online Bitcoin wallet, after an attack resulted in the loss of 4100 Bitcoins. A PGP-signed message at the home page of the now mostly non-operational site briefly explains the situation: 'Two hacks totalling about 4100 BTC have left Inputs.io unable to pay all user balances. The attacker compromised the hosting account through compromising email accounts (some very old, and without phone numbers attached, so it was easy to reset). The attacker was able to bypass 2FA due to a flaw on the server host side.'
There's no word yet whether Inputs.io will eventually resume operations or whether the security breach will force the Bitcoin bank out of business."
This is for worst or better, online wallet that CONTAINS your private key can be hacked like inputs.io. That's why it's recommended to use wallet like blockchain.info where you hold the private key so they can't spent bitcoin for you. In some case where they must hold the key for you (exchange service for instance) most of their coin should be in cold storage / not allocate to direct individual. In another news, Bitcoin value is at all time high over $300.
Great intro video... 31,306USD Raised of $50,000 Goal...
I'm so glad that Bitcoin is such a simple solution to the complexity of cash!
I don't respond to AC's.
Might want to make that more clear in story, it almost reads like an anti-bitcoin FUD thing.
So a 'bank' had their servers breached and money stolen... *yawn*.
---- Booth was a patriot ----
Unlike traditional bank, you can trace the money stolen where it goes but unable to get it back. Bitcoin have no way to force a transaction except if everyone would update their software to approve a transaction without the valid cryptographic signature something unlikely to happen considering the thousands of instance running.
So now I need a PhD in computer security to use Bitcoin without getting robbed?
In security, complexity is a smell.
Pick any two.
Holy shit, 4100? Is that ALL the bitcoins!?!? XD
No, but it is about $1.23M at current exchange rates.
4100 stolen, not sure how many they had. The current total number of bitcoin in circulation almost 1.2 millions each at about $ 300 piece. number of bitcoin in circulation price chart
It's computer fraud and abuse. It's not like they really robbed a bank.
which, amazingly enough, in mots of the west gets a lot more of jailtime for you even if you stole nothing of actual monetary tangible value....
though, again as usual, one needs to ask if they just took it themselves, their ex-employee took it or..
world was created 5 seconds before this post as it is.
And digital WoW gold is tax avoiding too? Pull your head out of your arse. The government has NO valid jurisdiction over arbitrary digital currencies.
We seem to be fast approaching the point where computer-based theft will be the way you "really rob a bank".
It's not like today's banks have all got huge safes full of bags with dollar signs on them -- not in the U.S., anyway. Money is becoming increasingly virtual. A dollar bill doesn't actually represent value; it represents debt, an IOU. A bank doesn't need to keep one physical dollar bill on hand for every dollar in its bank accounts; it only needs a fraction, because you don't expect 100% of your customers to come in on the same day to cash out. And thanks to the Federal Reserve system, there aren't even physical assets (like gold bars) of equal value to all the Federal Reserve notes in circulation. It's a bizarre system that only works as long as debt keeps circulating (buying and selling) and accumulating (loans with interest).
Koans and fables for the software engineer
Holy shit, 4100? Is that ALL the bitcoins!?!? XD
That's roughly 1.2 million dollars, my friend, at current exchange rates. And incidentally, there are aproximately 12 million bitcoins.
When our name is on the back of your car, we're behind you all the way!
Never, never, never trust your Bitcoin wallet to a third party, no matter how trusted.
Keep your wallet safe by maintaining personal, physical possession of it and adhering to safe network practices.
I think it is a misuse of the word "bank" using it to describe these websites.
Better known as 318230.
"A hacker with his computer can steal more than a hundred men with guns."
It does not sound like Nation State Attacker was at work here.
The attack was not so sophisticated that the infosec boys were left scratching their heads as to how the breach was made. In fact, for a so-called vault, Inputs.io leaving up the access to old accounts that skirt 2FA seems sloppy.
And, certainly, having 4100 BTC to spend for your porn and drugs would be motivation to some who are capable of such an attack.
But I assume central banks and gov'ts with propped up currencies don't want to see Bitcoin really take off. Just breaking everyone's trust in BTC is a win for them.
SLASHDOT: news for people who can't concentrate on work or have no life at all and got tired of yelling back at the TV.
Credit existed long before the Federal Reserve. J. P. Morgan used created money to help out banks in the Panic of 1907. The Bank of England created money to get its country out of panics in the 1800s. The private banking system evolved the system that the Fed later put in place on a more equitable basis (loaning to all banks instead of only to those that Morgan had a personal affinity for, for example). Elasticity was necessary for the banking system to function. The Fed just made that elasticity more under the public's control, so that it could be used for the General Welfare instead of for Morgan's private profits.
Which IS also by now pretty much the only way you could possibly rob a bank.
Banks around here don't have big bullet-proof glasses between you and the teller anymore. Simply because there is no cash drawer anymore. The cash is inside a safe that doubles as the table you're sitting at and only if the teller withdraws some amount from an account that amount of money appears automagically from a slit in the table. The teller CANNOT even give you the money in the safe since he simply has no access whatsoever to it. And the computer doesn't let him withdraw anything if there is no signature that matches the one stored, so he can't even withdraw from some random account to give you money.
Seriously, if you're in for money, rob a gas station. You get way more than you could possibly get from a bank (unless you're willing to put in more effort than going in and yelling "hands up").
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Then I guess they also have no business prosecuting the theft thereof?
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
That's what I said when the stock exchange hit rock bottom a few years ago, but boy did that handwaving create a shitstorm!
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Hey, if there was a country behind it we'd call it currency despite being pretty much the same system, where someone says one blubber is worth x dollars and you can create some by ... well, by creating some.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
WoW gold is ultimately money in Blizzard's bank accounts, which are indeed taxed.
No kidding!!! What do you say at this point?
Mining bitcoins takes real equipment and energy, not so dissimilar from mining gold. What makes gold worth money? Because we (as a global community) all got together and said "Gold is worth $X". Is it really worth $X? Yes, because that's what someone will pay for it.
What is a dollar worth? That value changes all the time, it is in reference to something else (gold, other currency, real material goods). The dollar is something that is made up that we all agree has value. Bitcoin is something made up that we all agree has value.
The big difference between gold, dollars and Bitcoin is this:
-Dollars can be printed at will by the government, so is theoretically infinite.
-Gold you have to dig out of the ground, so is finite, but we don't know how much is really out there.
-Bitcoin needs to be "mined", so it is finite (mathematically limited). We know the total quantity and how fast it will get mined.
why someone can just say a bitcoin is worth X dollars
Because it is a commodity, and the market price of a commodity is determined by the intersection of the supply and demand curves for that commodity. So, you **can** say that a bitcoin is worth $X. Now go find someone willing to either buy or sell at that price.
you can create money by "mining" for it with a graphics card
Well, you can go cut down a tree, make a table and sell it. Same thing, from an economics point of view.
It feels like something created by criminal entities which will eventually collapse or found to be fraudulent
Given the murky history of the creation of bitcoins, I can see how you might think this. However, let's suppose that it's true: Bitcoins are the product of criminal entities. What's the payoff? Bitcoins only have value because there is a market for them. It doesn't take much to create a run on the market and drive the price through the floor. Then again, there was the "Bitcoin Bubble" earlier this year; have enough bubbles and you can generate real money. It's worth reading up on Bitcoins, if only to see that it's the digital equivilent of Tulip mania. Try https://medium.com/money-banking/2b5ef79482cb for a nice overview of the bubble, or Wikipedia.
Yes, and this is why I keep telling people America is fucked up and the FRS is ridiculous. We don't have "economic growth"; when our economy grows, it gets poorer. When one person pays their debts and gains assets, another person must necessarily go into debt--not just become less wealthy, but actively move toward negative wealth. Poverty here is, on the books, worse than poverty in some small regions in Africa: our poor people have less than a Ugandan who has to walk 9 miles for water, but we still eat expensive beef.
Support my political activism on Patreon.
This isn't true. WoW gold has no value from an accounting perspective. Blizzard does not put it on their balance sheets or cash flows, they are not required to track or report it, and they have absolute authority to create or destroy it at any time. They also (try to) crack down on anyone trading it for real money. Unless you're speaking in a very very abstract sense, it is not money in any bank account, and it is certainly not taxed. Yet.
Credit existed in fourth (and probably fifth) century BC Athens. It was also largely responsible for inflation then: the monetary system was metal-based, but even the ancients noticed that old inscriptions and laws mandated unreasonably low prices for sacrificial animals, while people in their own time were buying and selling real estate for amounts of credit that couldn't be physically transported in any reasonable way as cash and that might not have even been available in circulation. The Athenians didn't have a Federal Reserve or central bank, just a mint for the physical coins and some private bankers for the credit. That's all you need to get the "bizarre system" that keeps cropping up in history.
As a side note, that "bizarre system" almost always ends up with the poor holding physical currency and the rich using credit. Playing along with the system gets you more stuff, because you can buy more with big credit than you can with two obols (although you could at least rent a prostitute for that).
There's a point here, and you're missing it.
... Bank robberies of Bank of America and Suntrust seem to be relatively common around here, I hear about at least one a year, sometimes 2. They seem to be doing fine making off with sums as high as 10k in some recent cases so while I understand what you're saying, they doesn't seem to be the end of the bank robbers taking case from the tellers.
Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
Do these banks somehow use a digital signature? Computer recognition of a written signature is still way too unreliable to use it as a primary means of access.
I read the internet for the articles.
Uhm, actually, it does, beyond any doubt.
Not sure what silly fantasy you live in, but currency used in the realm is most certainly a concern of the realm, and its written into law.
Persistent Volume manager for Kubernetes - https://github.com/dwimsey/openshift-pvmanager
Which currency isn't used as a tool for speculators, drug dealers, and criminals?
Exactly. We don't need another one.
During a course in criminal justice in college, the instructor actually stated exactly this, with a few reasons:
1: The cop on the beat sees someone with a computer in a coffee shop. They move on. Someone committing a bank robbery is obvious, and the street officer can intercept as the robbery is in progress.
2: Robberies are violent with tons of charges, from having a gun, to having a gun in a public area, to having a gun 10,000,000 feet from a school, to having a gun while committing a felony, etc. A CFAA violation is one charge.
3: Numbers are abstract. Someone threatened with a weapon is something jurors relate to on an emotional level. This means that the penalties will be a lot stiffer for bank robber who gets $500 versus a blackhat getting $50,000.
4: A good blackhat if caught can possibly get a job as a part of a plea bargain. A gangbanger shooting up a bank is likely going to face a life of McJobs and the revolving door of private prisons.
5: Physical security of banks is a lot higher than server rooms. In a bank, there is some security guy with some type of duty pistol. A server room has a HID lock on the door and maybe someone answering phones at a desk.
6: The economy has not hit bottom yet. Jobs are not returning in the US, and when they do, they are overseas due to the tax benefits (even in the US, H-1Bs and 1Bs are tax exempt.) This means that more people are forced to go the blackhat route. Think Breaking Bad, but in reality.
7: Companies view security has no ROI, making them an easy target for a dedicated intruder.
8: There are no penalties (lets be real, people forget about "ABC, inc. got hacked and all credit cards taken" in 30 seconds.) So, it is an open door.
9: You route stuff through a compromised box in China or another country, the investigation is over. Nothing can be done, period, about an intrusion.
10: There are plenty of tax havens to stash cash, and laundering these days is no problem at all for anyone who has a brain. All you have to do is start up a nightclub, and report completely packed earnings even if the place has nobody at the door... a couple years, and all income is now legit, and the clubowner will get good PR with a few donations to local charities.
So, all and all, it is actually amazing why businesses and banks are NOT hit harder.
Yeah, I know it's the "fad" to bash Bitcoin. But it's disappointing, because Bitcoin represents everything that us nerds reading slashdot should like: It's a mix of cryptography, freedom of speech, computing, networking, finance, economics, and even politics. Most of us here dig that stuff.
Get over the hype and take Bitcoin for what it really is: a fascinating experiment that has, so far, withstood the amazing barrage of publicity, hacking attempts, legal uncertainties, and remains valuable for reasons completely contrary to everyone that says it's worthless. It may become worthless one day, but consider the possibility that Bitcoin is disproving all your wildly oversimplified assumptions about what makes something valuable. It is completely different than anything else we know, and there's plenty of reasons to believe that it could succeed as much as it could fail.
Why does gold have value? Nothing is backing gold. Yet it has value, mainly because of its properties: scarcity, fungibility, density, beauty, etc. Bitcoin is really quite similar but with some different properties. Ease of transfer over the internet, fungibility, scarcity, storage efficiency, near-anonymity and built-in escrow. I don't think it's any more ludicrous for Bitcoin to have value than it is for gold to have value. And in the end, when I want to sell WoW weapons, buy webserver space, or play a few games of poker online, why would I use credit cards or paypal, which all require me to remember log-in creditials, give away personal information to be [improperly] protected by a third-party and/or pay a bunch of fees. There's plenty of value in being able to pay people across the world, instantaneously, without sacrificing your privacy, and without paying any fees. Why is that not valuable?
Mostly the teller can override the system, but the amount of money you can get out of him without some additional means is ridiculous for the average bank holdup. It's more a matter of time vs. money where getting much money out of the safe takes a lot of time (also one of the reasons why it takes ridiculous amounts of time for "processing" the withdrawal, it's an artificial block that should ensure that you don't get more than a few hundred bucks out of it every minute).
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
It's ultimately the product of people's computer time in WoW, which is a service provided by Blizzard through their paid-for and taxed-up business. If you're buying it with real cash, you pay for it through some perfectly ordinary, fully-taxed transaction. It's not a medium of barter outside of WoW so it strikes me that you're essentially trading some nominal portion of Blizzard's net worth.
Basically it's no more legally problematic than those vouchers towns put out that can only be spent at local businesses, or Mickey dollars. Although if I've missed something I'd like to know about it.
No kidding!!! What do you say at this point?
That's still a felony, afaik.
File under 'M' for 'Manic ranting'
Probably not. If you can't tax it, why bother?
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
and well that's why pre ww2 stock crash was actually something causing massive panic and the crash of 21st century is something people barely notice...
because on the whole masses are not going hungry over it. on the whole they have more - more tools, bigger tv's... that's whats wonderful about modern day - even if you're technically poor* you got access to a wealth of information and entertainment - and even if you're supermegafuckingrich what you eat is pretty much the same as what the people earning 1/10000th of what you do eat. a chicken is a chicken and how much filet mignon are you going to eat anyhow and a club sandwich doesn't get better if costs 1000 bucks than if it costs 16 bucks(base price for decent club sandwich with fries in Helsinki, in random place in america I bet you can get the same for six bucks...).
what you can afford if you're supermegarich is hired help of course, but the middle upper class in the west has been losing that habit as well.
sure, if you're supermegafuckingrich you can afford more coke and hoe's but you can't get even those in the ratio your income would let you to believe. I mean, it would be funny if gates rented 10 000 hoes for a party but I just don't see it happening.
*) poor in the so called west. poor in some other parts of the world are pretty fucked still but they were as fucked or more fucked before the stock market crash too.
world was created 5 seconds before this post as it is.
Dillinger lives. He drives a Tesla, and carries ultrabook instead of a machine gun.
---- Teach Peace. It's Cheaper Than War.
For larger amounts ,many will actually require you notify them in advance.
Want $10,000 in actual cash at once? You need to call a day or two in advance so they can have a shipment made.
When you 'mine' a bitcoin have you actually produced something of tangible value other than an electronic token which a group of people have agreed to exchange goods and services for?
ie does the process of 'mining' bitcoins actually generate some kind of useful computational result? Something thats useful in genomics, or crypto or whatever, outside of just 'more bitcoins'.
In the free world the media isn't government run; the government is media run.
That can only mean one thing. Aliens hacked inputs.io!
Get free satoshi (Bitcoin) and Dogecoins
But you aren't supposed to trade it for cash. We're talking about WoW gold here, not Diablo 3 currency. And even if we were talking about Diablo 3, the point is that if you make an income in virtual currency which has no legitimate real-world ties, it does not count as an income for tax purposes. It's just video game currency. Of course, I can only speak for the US laws; other jurisdictions may actually try to tax income in a virtual currency which requires the use of shady 3rd-party sites to obtain a fair-market value, I don't know.
Yes, mining performs the cryptographic operations that the entire Bitcoin transaction network depends upon.
No kidding!!! What do you say at this point?
At this point it is closer to futures or commodities, its value is derived from what traders are willing to pay each other for them with a certain percentage of people exchanging them for goods and services instead.
The 'mining' sounds stranger then it really is. There are an end number of bitcoins that will exist, but instead of having a central system that hands them out (like when the fed increases the money supply), there is a set of mathmatical problems that produce valid coins when being solved. It is kinda gimcky but has the same net effect, increasing the supply over time to hopefully match the ecosystem.
When I shutdown my laptop I store it in a safe to protect my bitcoins.
Get free satoshi (Bitcoin) and Dogecoins
"Why someone can just say a bitcoin is worth X dollars"
That's how it works. Everyone buying and selling has a different value for X in mind and when trades take place these values converge to a real number, a number that has been rising rapidly lately.
No, it does not produce anything useful, it is just a mechanism to throttle the increase in supply.
If I recall correctly, and maybe someone can describe this better, there is another area for growth that comes out of the math behind handling transactions. So having a machine sit and help wrangle the chains, which is critical for bitcoin working, can also produce new coins, which is computationally useful (at least within the ecosystem).
Bitcoin can't be designed to eliminate any risk at all. There are security holes in all computers. Offline wallets are vulnerable to theft. All transactions are recorded somewhat permanently for anyone, including the government, who can and probably is permanently recording all of them. The way bitcoin works is changeable in just about any way by a vote of the miners, a large proportion of whom can be pressured legally, because the big mining operations are publicly known.
Not only that, but it's designed in such a way that it's very, very difficult to secure properly. This is why people use third parties who presumably know how to handle the security.
No-one can say what a bitcoin is worth. All they can say is what it's been traded for. As for why "miners" get money, that serves a dual purpose.
Bitcoin is a solution to the problem of creating digital cash without a central authority to prevent double spending. "Miners" act as notaries. When Alice sends Bob some BTC, "miners" witness this and if they manage to create a new block on the blockchain, they note this transaction down in the distributed ledger. Without this ledger, Alice could simply send the BTC she sent Bob to Charlie, but since the notaries have noted Alice's transaction with Bob, Alice can't scam Charlie or Bob by double spending.
This is a service "miners" provide, and they are paid for it. Finding a block, and therefore being able to note down the transactions a miner has seen into the blockchain is a computationally expensive task. It has to be to make it unattractive to try to falsify the record. Currently the majority of the reward for these notaries comes from the new coins created with each block. This is the second purpose of mining - creating the Bitcoin money base in a manner that distributes the coins to many people over time. As you probably know, the amount of new coins being created will taper off over time, and transaction fees are expected to pay the notaries enough to bother with it. If they do not, fewer people will bother with using their electricity on "mining" and it will get correspondingly easier to find a new block until things even out.
it strikes me that you're essentially trading some nominal portion of Blizzard's net worth.
In an abstract sense, I wouldn't argue with this, though it's hard to say exactly how much. Even to get a price for the currency is difficult due to the lack of an open, fair market; your best approximation would be shady 3rd-party sites, whose prices vary considerably and are likely inflated due to the risk of being banned.
I'm only speaking from a legal/tax/accounting perspective. When Blizzard issues new currency or processes transactions, they aren't required to report them or collect tax on them. When an adventurer scores a big bundle of loot, it doesn't count as a real-world income for tax purposes. etc.
At least you won't have to worry about security, as you step out the door you'll probably be followed by more Federal, state, county and local cops of various flavors than would respond to a presidential assassination attempt. I've always wanted to do something like pay for a new car in cash rather than by check, just to see how many hoops there are and what the law enforcement response would be, but my wife always puts down my more entertaining ideas before I can actually carry them out.
"Think about how stupid the average person is. Now, realise that half of them are dumber than that." - George Carlin
If Blizzard are obliged to provide goods or services in exchange for the WoW gold, then it will be on their balance sheet as a liability.
If there was a country behind it, you could use it to pay your taxes, and that is what gives it its value.
I am going to propose that wealth really needs to be measured in energy. The more energy available, that can be converted into almost anything. Garbage can be "boiled" via thermal depolymerization into usable monomers, mine tailings can be processed and the toxic metals isolated. Even very inefficient processes like making hydrogen from water can be made useful. Of course, BitCoin mining requires a good amount of wattage, especially at this late date in the mining curve.
I think it must depend on where you are. When I went to the credit union and did a withdrawal fairly recently she had a drawer full of cash in front of her, and since it was a couple thousand dollars she filled out a form and took what was lacking from the next teller's drawer.
"Think about how stupid the average person is. Now, realise that half of them are dumber than that." - George Carlin
Well, I agree with you on one point: Robbing a bank by walking into the lobby of your local branch is very romantic, but it's a horrible and dangerous way to steal money, and has lousy returns. I'd say we've long past the point where that was the best way to rob a bank. (I'd say owning or running a bank is probably the best way to rob it...)
A bank doesn't need to keep ANY dollar bills on hand for dollars in their bank accounts; only branch banks need physical currency at all. There are plenty of non-branch banks out there that don't have any physical currency; what would they need it for? The Fed does not require any bank, even Federal Reserve members, to hold any particular portion of their assets in currency (although I do think Federal Reserve members do need to let their account holders withdraw their deposits as cash at any point; it's how the Fed actually distributes cash out into the economy.)
A dollar bill doesn't represent "debt"; it represents one dollar's worth of the world's total supply of dollars/dollar-denominated assets. In that sense, it's little different from a share of stock. Some of those dollar-denominated assets are debts, some are coins in my pocket, some are bits on my bank's hard disks, some consist of stacks of $100's in a cave in some benighted 3rd-world kleptocracy. If the supply of dollars increases faster than dollar-denominated assets, we have inflation, if the reverse happens, we have deflation.
You may of course choose to blame the Federal Reserve for whatever you like, but the Fed did not create fractional reserve banking or fiat currency, nor did they originate the idea of moving money around through a method other sacks of cash.
And even if we still had the gold standard, why would we tie the amount of gold on-hand to physical currency? Virtual currency is easier and safer to store, manage, and move. An electronic dollar is no different from a $1 bill in my pocket.
BTW, yes, credit is the backbone of every modern economy in the world; this is hardly new... it's been the case for centuries. Modern capitalism would be utterly impossible without it.
True, but they aren't. Moreover, the currency and all virtual property is wholly owned by them. See the EULA. It wouldn't make much sense from a business perspective to accept WoW gold in exchange for real-world goods or services; they'd be giving away something of tangible value to get something they already own. That said, such an offer might be a part of a larger strategy, e.g. to keep players enjoying the game by providing another way to get certain rare items or cosmetic effects for which Blizzard would otherwise charge real money.
I've been analyzing bitcoin lately, and have come up with the following reasoning:
As the coins are limited to 21M coins, you can, at this date, purchase 1/21Mth part of all the coins in the world for $300,-
Even if you put the odds of bitcoin supplanting US dollar very slim (1:1000), the only rational choice is to buy bitcoin.
If in 2030 the world uses bitcoins, you end up owning a sizeable portion (1/21M) of the entire money supply of the world's default currency.
How is this not a good deal? Heck, even at 1:1000000 odds of bitcoin supplanting US dollar would still make sense at $300,- per coin.
Where is fault in my logic? It seems too easy.
Bram Stolk http://stolk.org/tlctc/
And never let your hard drive crash, or your removable drive go through the washer.
"Think about how stupid the average person is. Now, realise that half of them are dumber than that." - George Carlin
As far i know, you can see the history of each bitcoin in the blockchain, each wallet that have and had it, each transaction that it had been involved into. If those bitcoins where moved to a particular wallet, any participant in the bitcoin network can see to which wallet it went it all, and what that person did after that. Maybe the name of that person is not known yet, but the people that will receive some of those bitcoins in exchange of something may have a hint on who they are or where they are living.
Unless, of course, the private key got erased instead of copied, or used to transfer them to somewhere else. Then the bitcoins will vanish in practice, but won't be a robbery in that case.
Go to the teller. Ask for cash. If they ask why, feel fee to give them the honest answer that you're buying a car at auction. Fill out the CTR. Leave with cash.
Nobody cares.
This is great. Usually when a bank loses everything the taxpayers are forced to bail them out. The customers actually losing is a breath of fresh air.
I love Jesus, except for his foreign policy.
Secure and online: http://a.fsdn.com/sd/logo_w_l.png
The very fact that I have to pay taxes with and for it lowers its value to me.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Please tell me the dollar value of, say, a sword from Warcraft. Or a Steam Trading Card. Or a TF2 item.
It's EXACTLY the same - a virtual item gains "value" from the amount others are willing to pay for it. Enough people like that makes a market, and the item a commodity.
Hell, we deal in "frozen concentrated orange juice futures" in the "real" world of stock markets, I see no reason that Bitcoin is any different.
There can only ever be X amount of BitCoin. Like there are only one thousand "foil" cards in a trading set in the world, or whatever, or only 5 golden tickets in your Wonka Bars. Scarcity and demand create a value that far exceeds what you might be personally willing to pay.
And like everything else in real life or virtual, you can make money using Bitcoin without ever using it as a currency. I put £20 into Bitcoin a few months ago. At one point it was worth £15. Now it's worth £30. If you know how to play that market, you can make money without ever buying a single "real" product with the currency.
I bought some Humble Bundles with the "interest" that accrued through me doing absolutely-bugger-all. I don't "mine", and CPU mining is dead now as the Bitcoin protocol ensures that supply and demand balance by making Bitcoins "rarer" and harder to find as time goes on, so that whole side of it is practically irrelevant to the casual user.
Sure, you can scam people on it. Sure, you can lose money. But you can also use it like any other commodity. My Steam Wallet has ZERO value outside of Steam. My TF2 items are given to me for free (I don't buy them). But at some point I am able to carefully watch prices, track various commodities, come out with a "virtual" profit that I can them use to buy free games. Since the Steam Trading Card Beta began, I've had about £50 worth of free games on my single, 10-year-old Steam account, just by leaving games running in the background and then trading the cards / items I got from that. (Hell, I made £10 in Halloween items in TF2 alone this year, now I know what I'm doing and what websites to trade various things on).
People who instantly leap on the "it's a scam" line are liable to get scammed in real life - because they just don't understand that it's nothing more than legal trade in commodity (admittedly there's illegal trade as well, same as everything else from stolen WoW accounts to cloned virtual items, etc.) and is subject to the exact same "rules" as your real money.
It can collapse. It can collapse because of fraud. So did the Zimbabwean currency, if you remember. I think I'd rather have had my money in BitCoin than Zimbabwe any day. But that's just the same as everything else involving money - a balance of risk versus reward on a simple numbers game.
Most countries tax income earned in bitcoin in exactly the same way as they tax income earned in their own currency or any other country's currency.
why someone can just say a bitcoin is worth X dollars
Anyone is allowed to offer to buy bitcoins from you at a price they choose. That's normal free market bartering.
it's extremely confusing to actually try to use the "currency"
Have you ever used any bitcoin wallet software? It's pretty simple once you know that bitcoins are stored in addresses, and you can have as many addresses as you want. (Though it is sometimes a bit hard to find an exchange you can actually buy bitcoins from.)
and you can create money by "mining" for it with a graphics card
Bitcoin mining is the process of creating proof-of-work statements that verify the transaction history of the Bitcoin network. As a reward for this work, and as a way of accomplishing the initial minting as fairly as possible in a decentralized system, mining creates new bitcoins for the miner.
It feels like something created by criminal entities which will eventually collapse or found to be fraudulent
The whole system is open source and well-reviewed. I don't think it makes much of a difference who it originally came from.
Not trusting bitcoins to web wallets doesn't mean you can't make encrypted backups.
So, for security, you had to provide a telephone number? Ahahahahaha.
Bitcoin makes everything about currency handling harder for the average person.
That's not a feature of Bitcoin.
The only interesting thing with Bitcoin is that there's a limit to the amount of bitcoins. But just as a govenrment mandate detached the dollar from gold, a government mandate could change relevant representations+algorithms to allow the government to produce more bitcoins at will. And, just as everyone accepted who accepted US dollars accepted the former change, they'd accept the latter change too.
Bitcoin is an open source project, used by many to get away from centralized controls like that. Many people would stop using it, or work on making the proper version more anonymous rather than switch to some specific government's fork of Bitcoin.
"Online wallet" seems like the equivalent of asking a homeless man to watch a shopping cart full of alcohol for you. What is the point? Genuinely curious because I bounce BTC through several exchanges, a wallet on my PC, and a paypal style service for cashing them out for USD. I don't see what value an online wallet would provide to help me with my use cases.
I didn't mean that you said it eliminated all risks. I meant that there wasn't even one risk that was eliminated (though perhaps some were reduced). Unless you're building your own computers from components that you manufactured, you're making your own operating system, you're making your own bitcoin software, and so on, you are taking on third party risk that cannot be eliminated because you're accepting and using security-critical components developed by third parties. Unless you are literally generating your key by pencil-and-paper calculation (which is not the normal way of doing things by the design of bitcoin because it raises the risks of insufficient randomness and human error), your offline wallet's key was almost surely on a computer and an operating system that might have been compromised while the key was present or the system might not have deleted it.
All transactions being recorded may be a feature, but it still greatly reduces the strength of your argument about spying, particularly when statistical analyses are used.
It may happen that if bitcoin changes due to legal pressure, people will move to other currencies, but there are a lot of reasons not to assume that's a sure thing. Bitcoin will already have been established and working which will reduce the drive to switch, the risk of such a thing happening again will dampen enthusiasm, the newly-explicit lack of legal legitimacy (which hampered bitcoin growth) will hamper growth, and there's a high chance that alternatives will be permanently stuck with just about only enthusiasts as users.
In the long run a society can't substitute circuses for bread, a roof over your head, and decent medical care. Food and housing insecurity does more to prompt riots than not getting another season of whatever TV show is tops in ratings now.
Tom Swiss | the infamous tms | my blog
You cannot wash away blood with blood
So, like any other nascent currency.
1. Grows until enough of the people are using it;
2. Gets regulated by the people, through the government;
3. The usual suspects don't like joining in, and keep their wealth in other forms.
Bitcoin has no features except that anti-money laundering laws aren't applied to it yet, as they are with mainstream currencies.
A gold bar doesn't represent anything of value either. It, like the dollar, is only valuable because we all agree it's valuable.
Wealth is more than just the number of dollars you ave in the bank. We absolutely have economic growth even with our debt. Look at all the stuff we have (e.g. cars, food, video games, televisions cell phones, roads, bridges, trains, airplanes, etc). And we have one more thing that Ugandans don't have: the ability to pay back most of the debt that allowed us to get all that stuff.
If you're definition of wealth means that Ugandans are more wealthy than Americans, then I want to be poor.
What about information? Knowing better ways of converting matter/energy states into other desirable states surely makes us more wealthy.
There's an abusive twist of logic that shows that every American owes China about $120,000 right now; imagine if you were called on it.
We're facing a situation where our Government has essentially become the welfare family down the street who quit their job and keep filing for credit cards. This one was $21,000, the new one they're giving me $35,000, I'll do the 14 month interest-free balance transfer... ooh, this bank is offering me a card for $50,000... and so on. I know people who have credit cards with $120,000 limits and they make less than I was when I worked at K-Mart.
Essentially, the government only operates by taking on more and more debt, with no ability to control it. If the government defaults, it can't operate; so imagine the Government shutdown, plus they shut down food stamps and WIC--or print money to pay for welfare. If that stuff just shuts down, hundreds of millions (47% of the 300 million is about 1.4 hundreds of millions) will be starving on the streets--and the lack of income to shops from their purchases will lead to an economic crash, loss of jobs, further economic damage, etc. Almost everyone will be starving. If they print money, suddenly all your cash and your salary become worthless (pre-WW2 Germany style).
You're living in a fantasy. You have big screen TVs? So does the welfare family down the street. They had them when they cost $5000. Are they richer than you or just more deluded?
Support my political activism on Patreon.
The point is people are constantly fighting back against bitcoin regulation as a currency because Bitcoin isn't a bank. They also fight for Paypal to be regulated as a bank. Bitcoin isn't real money; nothing of value was lost.
Support my political activism on Patreon.
Bitcoin isn't real money, but it does have real value... and it's reasonable that changes in that value could be taxed, much like the increase in value of any stock that you may own.
File under 'M' for 'Manic ranting'
"Depends on" in the sense that if you didn't make people do pointless busywork the scheme wouldn't work, yes.
Doesn't mean you have actually done anything of actual value, though. Mining work is basically completely pointless.
Not that this is what's going on, of course, but this came to mind:
1. open bitcoin "bank"
2. get lots of deposits
3. "get hacked" and close up shop
There is no step four, the profit's in step three.
Counting votes is pointless busywork without which the scheme - democracy - couldn't work. We could avoid it completely by simply obeying whoever happens to have the biggest club. But that has other problems which, at least in some people's minds, justify the extra expenditure required for a somewhat decentralized power structure, rather than one that's completely controlled by a single entity.
Forget magic. Any technology distinguishable from divine power is insufficiently advanced.
Only about 30% of our debt is to foreign countries, the rest is internal debt.
Our per American is about $53K, and only about $4K of that is to china.
So my question to you is this...
Why is china giving us credit we can't ever hope to pay off? Are they stupid?
It's not like credit card companies make tons of money by giving tons of credit to people on welfare to big big TVs.
Excellent point. "Money" in all forms is merely a proxy for the power to obtain the goods or services we desire. It's just that (at a given time in a given society) some proxies are more universally acknowledged to have worth than others. If civilization were to collapse, an ounce of gold might be considered worthless compared to an ounce of food.
But there is common comfort in either, which is why some people probably long for a return to the days of the gold standard: both gold and food are tangible and can be possessed by anyone. Digital currency may be convenient, but it's abstract, requiring a reliable and secure computing infrastructure to make it function. Which brings us back to the article.
Koans and fables for the software engineer
Basically it's no more legally problematic than those vouchers towns put out that can only be spent at local businesses
Those are not legally problematic, but they are taxable.
When you 'mine' a bitcoin have you actually produced something of tangible value
The miners are the people who do the computational work to verify transactions. Without miners the system could not process any transactions. So, yes. They provide a necessary service within the context of Bitcoin.
They kind of do.
Look at interest schedules. You often find situations where 50% of the loan is interest; but most of the interest comes up front because it's accruing on a huge balance being slowly paid down. You have $200k in that loan, you make a $1000 payment that's $990 interest accrued over 1 month; you have $50k in that loan, you make a $1000 payment that's $250 interest accrued over 1 month. The balance starts coming down much, much faster--the amount of interest that one month is 25% of what it was on the first payment, but the amount of interest over that year's payments is much less than 25% of what the bank got for the first year because you're paying your loan balance down faster.
Credit card schedules where you make minimum payments take forever to pay off. In the process, you'll pay many times more than the balance on your card. The bank also gets to claim the balance as an asset and deduct that when you default--in some cases with high-dollar mortgages, the bank can bring in more than the loan and then claim a loss (i.e. if the amount of interest they accrue is less than the remaining balance, but the remaining balance is still more than the amount of interest they accrue, they will claim a loss even though they physically have more dollars now with your total made payments all together).
There are plenty of ways to loan out piles and piles of money, have people fail to pay it back, and walk off with sacks of cash. Credit card companies--banks, actually, since Visa just rakes fees and banks stamp VISA on their cards and let VISA supply the infrastructure--sure as hell do make the bulk of their money off those with poor credit. This is a documented and well-known fact: people with good credit just aren't profitable; people with bad credit are cash cows.
Support my political activism on Patreon.
And that's exactly what people have been fighting: Regulation of Bitcoin, taxing of Bitcoin, treating Bitcoin as a legal currency, subjecting Bitcoin to SEC rules, etc. They want it to be a Libertarian wet dream with no rules.
Support my political activism on Patreon.
we have a reliable computing infrastructure for trading bitcoins dollars and gold. The security provided by bitcoin whatever it's shortcomings is more than the security provided by the dollar or gold (which is none). Banks and governments provided security to compensate for the lack of security inherent in these currencies, but they could do this for bitcoin as well.
Why would we want to fall back to a currency whose main benefit is that it will still work in a limited way if all the computers in the world stopped working, until/if that actually happens?
So you are saying that the welfare family who buys more luxury items than the responsible family next door actually *can* afford all those items, but they are unnecessarily and irresponsibly going into debt to get those items now rather than later?
This example is quickly making less and less sense.
There's no need to tax bitcoin or officially treat it like currency or any of that shit.
Bitcoins have value... if you own some bitcoins, it is reasonable to be taxed on the monetary value of however much the bitcoins you own have appreciated, just as you would be taxed on the value of any private stocks you might hold, which may just as untrackable by the government as bitcoin is.
File under 'M' for 'Manic ranting'
I didn't say we should. But a lot of other folks find gold more comforting, as irrational as it may seem. A number of American talk radio shows are interspersed with ads for buying gold coins in preparation for the impending collapse of the government and the US dollar. Those companies are largely predatory (that's another topic entirely) but clearly they're marketing to someone...
Koans and fables for the software engineer
To the usual nattering nabobs of negativism, I suppose you haven't heard of multiple encrypted backups?
Not at all comparable. Counting votes is gathering actual information. The mining work isn't.
But the process of bit coin creation doesn't produce anything that can actually be used outside the bitcoin system? Unlike, say, mining gold (gold having numerous practical uses).
In the free world the media isn't government run; the government is media run.
And mining, eg, gold doesn't just produce something only useable as currency. So mining gold isn't combarable either. The only thing I can think of thats comparable is... a ponzi or pyramid scheme.
In the free world the media isn't government run; the government is media run.
That made me chuckle. Can I mod down my own GP comment?
My comment would have made a lot more sense if the URL was Slashdot.org/logo.png
It's computer fraud and abuse. It's not like they really robbed a bank.
which, amazingly enough, in mots of the west gets a lot more of jailtime for you even if you stole nothing of actual monetary tangible value....
though, again as usual, one needs to ask if they just took it themselves, their ex-employee took it or..
yeah, it's not like 4100 bitcoins are worth about 1.3 Million USD at the moment with a tendency to increase this value faster than anything else at the moment...
That would be taxed as a Capital Gain in the UK, and most countries have similar rules. In most cases it will be the same as selling shares at a profit. If you bought Apple shares at $90 each in 2009 and sold them today for somewhere in the region of $500 ($512.49 as I type this), would you pay tax?
Well, I won't go that far. There is a valid technical reason why miners have to do nonsense work. But that doesn't really make that work itself meaningful. It is literally a waste of time of energy, because that is what it is designed to be, because the whole system would collapse if you could do it too quickly, so you have to force people to waste time.
On average, it kind of works that way.
It's making less sense because you're forgetting the concept of a "credit crunch". What do you think will happen to the economy if college students stop taking student loans?
Support my political activism on Patreon.
A credit crunch is the reduction in availability of loans, not the reduction in willingness to borrow money. In a free market, less people borrowing money would mean a smaller supply of investment opportunities and more competition for the people that still want to borrow leading to lower interest rates. The lower interest rates might spur more borrowing, so the interest rate will actually just reach an equilibrium point based on the supply and demand for borrowers.
I don;t see what this has to do with anything.
Uh.
Year 2000. $100M of loans borrowed. Incur interest, $110M needed in the money supply.
Year 2001. $110M of loans borrowed. Incur interest, $120M needed in the money supply.
Year 2002. 2000s pay off their $110M loans with money they made from 2001s buying crap. $120M of loans borrowed, $130M needed in money supply. 2001s have money from what 2002s buy.
Year 2003. People stop taking loans.
Year 2004. 2002s are ... unable to get money to pay their loans because the fucking money supply has deflated! (or: Ceased to inflate because nobody is taking new loans)
Notice how when you borrow $100, you need more than $100 to pay it off? That's why we need inflation for our economy to function. If loans slow down--if population growth slows, if people stop taking loans, if banks stop giving loans--you get a recession. A terrible recession can become a depression.
Christ, it's like you're not really an economist. Go back to whatever college you got your degree from and demand your money back.
Support my political activism on Patreon.
Notice how when you borrow $100, you need more than $100 to pay it off? That's why we need inflation for our economy to function.
You're retarded. Even if there were no inflation at all or even deflation, you would need more than $100 to pay of a loan to compensate the lender for opportunity costs. The interest rate would just be lower than with an inflationary currency.
I didn't study economics in college. I got a degree in computer science, but I can use my brain to think. It's pretty obvious to me you don't know what the fuck you are talking about.
That is because it is value and not a representation.
Change is certain; progress is not obligatory.
Well, I won't go that far. There is a valid technical reason why miners have to do nonsense work. But that doesn't really make that work itself meaningful. It is literally a waste of time of energy, because that is what it is designed to be, because the whole system would collapse if you could do it too quickly, so you have to force people to waste time.
Yeah I get that. But it would be nice if it also actually produced some useful work like crypto, genomics, protein folding etc. as a byproduct. Plenty of gold gets used in industry. Just think about those awesome gold hifi cables (oh.. wait).
In the free world the media isn't government run; the government is media run.
I'm an alien, convince me why an atom with 79 protons is more valuable than most others. Convince me why it is worth destroying entire civilizations in order to stockpile this element into vaults. Do you need it to survive? Do you need it to procreate? What makes this substance so valuable?
I'm sorry, you don't have the necessary documentation to enter this country, we are deporting you.
Change is certain; progress is not obligatory.
If I'm an alien on earth that means I have access to technology far more advanced than a species whose farthest manned mission was to their own moon. I don't think any of these puny humans will be making me do anything I don't want to do. They're lucky I just want to learn about them rather than killing them all to turn their whole planet into a intergalactic space-golf resort.
Or maybe you're really a gardener, only here due to your planet Melmac exploding because of a catastrophe involving a nuclear war and have nowhere else to go. We don't have an immigration agreement with Melmac and as such, you are subject to being deported by the Alien Task Force.
Change is certain; progress is not obligatory.
You need more than $100 to pay off a $100 loan. There is $100 in the money supply. How do you provide more than $100?
The vast majority of the money supply in the US is non-existent. It's loaned into existence--it's owed money. If you stop loaning money, the money supply stops growing. This greatly decreases liquidity in the economy for the transfer of wealth.
The above illustration is for a mostly or completely loaned-into-existence economy: all money is actually owed to the bank, which primarily outputs money in the form of loans. If the bank makes a profit (as it must), it's bringing in more money than it's genuinely expending into the economy (i.e. to build new branches or pay tellers). That means, eventually, all money is owed to the bank. Unfortunately, with interest, that's more money than exists--unless perpetually more money is loaned into existence so that all that debt can be paid off.
This works even when you bring into the argument that the primary source of wealth is labor, and that you can work more to obtain more money: that money comes from somewhere, and its eventual source is a loan; and as the bank gets its loans paid back to it, the money supply shrinks and people simply can't pay you for labor (the liquidity argument stated above).
You can try to argue whatever vague shit like "That's ridiculous" and "You don't know what you're talking about" or even make some fancy technical counterpoints (several exist); but when you come straight down to the raw argument--that reducing the growth of the money supply by slowing down the amount of money put into the money supply by loans would cause an economic recession if not a depression or outright collapse--you're absolutely wrong. Shit, it's happened in the past decade: there was a collapse in demand for houses as the prices leveled off, which turned into a combination of defaults and fewer loans being handed out (which lead to more defaults because less money supply). Economists have been worried for several years that students will soon wise up and stop taking huge student loans, causing another drop in demand for credit and another severe economic recession.
It's a continuous theme in modern economics: people might stop $IRRESPONSIBLE_DEBT_BEHAVIOR but we've come to realize our economy will collapse if people stop taking out $50,000 in credit card debt and buying huge SUVs and getting second mortgages and $200,000 student loans.
Support my political activism on Patreon.
You need more than $100 to pay off a $100 loan. There is $100 in the money supply. How do you provide more than $100?
Your question is how would it work if someone borrowed the entire supply of bitcoins and had to pay it back with interest?
It would work the same way as any other currency, in that it wouldn't actually work, and you'd have to provide the interest in some other currency or commodity.
Even if you did this in dollars, simply printing more dollars in order to pay the interest is basically like not paying the interest at all.
Inflation is not some tool designed to allow the payment of interest. Interest is supposed to represent a real transfer of wealth in exchange for assuming risk and opportunity cost. By loaning money, you are trying to increase your wealth not just break even with inflation.
I can tell you've been watching zeitgeist plus whatever anti-federal reserves conspiracy "documentaries" you've managed to find, but the arguments that are presented in these circles (and that you are repeating), valid or not, is not relevant to this discussion.
You made a claim that interest is necessary, and have simply recited a bunch of non-sequiturs to support that claim.
"People would not be able to pay the interest on their loans" is not a reason we need inflation. If this were true, we might as well simply eliminate inflation and interest and charge a tax on money sitting in vaults or something
What is "Zeitgeist"? Time ghost? In any case I've not seen any such thing. Have you considered I might have a functional brain, rather than be jacked into Fox News or CNN or whatever anti-republicrat conspiracy machine stands philosophically opposed to the one you're jacked into? Come on man, I live under a rock; I read fantasy novels and don't watch TV news (I do, however, read The Onion, which is how I keep up on current events).
I've been running numbers in my head and working out economic theory, also looking at stuff like Keynesian Economics (severely flawed) and Austrian Economics (less flawed). There is actually no working economic system; they all eventually collapse, it's a matter of magnitude of collapse. Some will be a huge roller coaster ride; others will have good times and bad times, rather than great times and times of mass suicide and starvation. Some systems allow better for the concentration of wealth into the hands of the few who manage to keep it during economic collapse, while others make concentration of wealth harder and more readily facilitate dissemination of wealth during economic collapse.
You assume that "Y doesn't work without X" is the same statement as "X exists because Y". Gasoline engines do not work without gasoline, which could not have been invented without oil. Oil was not created by Jehovah for the purpose of running our gasoline engines; oil existed due to the events in the history of the earth, and facilitated gasoline and diesel engines. More importantly, are you honestly trying to argue that we could have usury in an economic system that doesn't experience inflation?
Support my political activism on Patreon.
What is "Zeitgeist"? Time ghost?
So you can translate from german but you don't know what the term "zeitgeist" (which is also a term used in english) means? You could have just claimed not to have seen the movie without trying to prove you have never even heard of the term before. Even if you had never heard the term, you could have just looked it up.
Should I assume that you are not actually this dumb, and rather are just lying? But that would mean that you are lying in a way that makes you seem dumb, which is pretty dumb. So maybe you are that dumb.
Have you considered I might have a functional brain
I assume that of everyone when I first talk to them. I now have my doubts.
More importantly, are you honestly trying to argue that we could have usury in an economic system that doesn't experience inflation?
Yes, but I wasn't even trying to argue it. I was stating it as an obvious truth without any support because I didn't think it was required.
just because lending money for interest is allowed, doesn't mean that 100% of the economy is based on lending/borrowing.
This works even when you bring into the argument that the primary source of wealth is labor, and that you can work more to obtain more money: that money comes from somewhere, and its eventual source is a loan;
This is false. This assumes you can only work in exchange for an inflationary currency. Even if your paycheck came in dollars, you could immediately exchange your dollars for gold (a non-inflationary currency), and break the cycle, or you could just buy things with it (e.g. food, etc), or you could lend it to someone else (e.g. put it in a bank), or you could invest it (e.g. buying stock).
You call valuing a dollar today higher than a dollar tomorrow "usury", but it doesn't matter what you call it. It is what a rational person would do if you live in a universe where proper investing increases wealth faster than just working hard(e.g. the time used to build a shovel is saved many times over than digging every hole with your hands)
There is an exponential increase in wealth as time goes on, because wealth can be used to create more wealth, and the wealth needed just to survive is a smaller percentage of total wealth, so even more can be used for investing.
There is actually no working economic system; they all eventually collapse.
I could say all mathematical theories are eventually proven wrong. As ridiculous as this statement is, how long will it take to prove I am wrong? Luckily the burden of proof is on me.
Furthermore, you can leave a term like "collapse" vague, and when it turns out that some economic systems just adapt, you can claim that it collapsed and a new one took it's place, regardless of how minor or gradual the change is. Maybe to others the examples of previous economic systems that failed is good evidence that *all* economic systems fail, but this is a logical fallacy.
So you can translate from german but you don't know what the term "zeitgeist" (which is also a term used in english) means? You could have just claimed not to have seen the movie without trying to prove you have never even heard of the term before. Even if you had never heard the term, you could have just looked it up.
Option 3: only hear it from idiots in political conversations, similar to the way stupid shit from Farenheit 911 was spouted around, so never bothered to care. Zeit and Geist are very commonly known words, by the way; it's like saying you know what "das ist gut" means in German. No shit. Everyone knows that.
More importantly, are you honestly trying to argue that we could have usury in an economic system that doesn't experience inflation?
Yes, but I wasn't even trying to argue it. I was stating it as an obvious truth without any support because I didn't think it was required.
It's an obvious truth that you can lend money and require more than 100% of the lent money to be paid back as a matter of course of economic activity and not run out of money if the money supply doesn't increase?
Is it also an obvious truth that you can perpetually fill glasses from a 1 gallon container of Iced Tea without ever making more tea?
This works even when you bring into the argument that the primary source of wealth is labor, and that you can work more to obtain more money: that money comes from somewhere, and its eventual source is a loan;
This is false. This assumes you can only work in exchange for an inflationary currency. Even if your paycheck came in dollars, you could immediately exchange your dollars for gold (a non-inflationary currency), and break the cycle, or you could just buy things with it (e.g. food, etc), or you could lend it to someone else (e.g. put it in a bank), or you could invest it (e.g. buying stock).
Okay, now I know you don't know what the hell you're doing. You're one of those people who thinks the Stock Market isn't a zero-sum game and that magic money comes out of it; I've had this argument too many times. The simple truth of the stock market is that money is exchanged around for goods (stock slips). If you get money out, someone else lost money: money is only moving around, not actually increasing.
You call valuing a dollar today higher than a dollar tomorrow "usury"
Usury is attaching interest to a loan. Technically it's attaching "unethical, illegal, or excessive" interest to a loan or just making loans on immoral terms or whatnot; the biggest historical use of the term is in Judaism, where Jewish law prohibits charging interest at all to Jews. It calls the practice "Usury", and states that it's moral in the eyes of God to charge interest to Gentiles but never to Jews.
It is what a rational person would do if you live in a universe where proper investing increases wealth faster than just working hard
Loans are an investment: they transfer wealth from one person to another.
There is actually no working economic system; they all eventually collapse.
I could say all mathematical theories are eventually proven wrong. As ridiculous as this statement is, how long will it take to prove I am wrong? Luckily the burden of proof is on me.
Furthermore, you can leave a term like "collapse" vague, and when it turns out that some economic systems just adapt, you can claim that it collapsed and a new one took it's place, regardless of how minor or gradual the change is. Maybe to others the examples of previous economic systems that failed is good evidence that *all* economic systems fail, but this is a logical fallacy.
All economic systems eventually reach a state of unsupportable inflation, excessive wealth concentration, or liqui
Support my political activism on Patreon.
Zeit and Geist are very commonly known words
Yes they are, and they are very commonly used together to form a compound word "zeitgeist".
It's an obvious truth that you can lend money and require more than 100% of the lent money to be paid back as a matter of course of economic activity and not run out of money if the money supply doesn't increase?
Yes, for example, take any economic system that has no lending in it at all. Have one person borrow $10 to buy something and then pay the lender back $11 the next day. Did the money supply run out? No, because we didn't use 100% of the money for borrowing, which is *EXACTLY* what I said.
You're one of those people who thinks the Stock Market isn't a zero-sum game and that magic money comes out of it;
I don;t see how you could infer that from anything I've said. In fact I implied the exact opposite when I said that investment creates wealth, and used the stock market as an example of investing.
Loans are an investment: they transfer wealth from one person to another.
Yes, and if done properly, they create enough wealth so that the wealth transfer form the borrower to the lender is offset by the wealth for the borrower. For example when a student takes out a school loan, the goal is that the wealth of the knowledge the student gains is more valuable than the money spent on the loan. If it is not, then the student's loan was not a good decision.
Loans are an investment for the lender, and *can* be an investment for the borrower as well. The loan is a good investment for the lender if the borrower pays the money back, and it's a good investment for the borrower if whatever he bought with the money increases his income by a margin greater than the payments on the loan.
All economic systems eventually reach a state of unsupportable inflation, excessive wealth concentration, or liquidity failure.
Are you aware of the term falsifiability? Lets say hypothetically this was incorrect, what might be some hypothetical evidence to show that it is wrong?
We have had a rash of "bang-bang" style bank robberies in my County, over the past 3-5 years. A couple of these serial robbers have been caught. Anyway, the reported average take is usually somewhere between $3000 - $8000 or so. In my opinion, that's no where near worth the risk. That's not even chump-change, and far more than that is stolen minute-by-minute by white-collar criminals.
These are my friends, See how they glisten. See this one shine, how he smiles in the light.
In fact I implied the exact opposite when I said that investment creates wealth, and used the stock market as an example of investing.
Investment in the stock market moves wealth; it does not create it. In our current system, investment in the stock market decreases wealth: broker's fees and taxes are taken from the movement of wealth in a system that doesn't actually create anything. The brokers supply the service of moving stocks around; but the act of moving stocks around doesn't produce any useful labor output. Even banks produce useful output: they facilitate business transactions, meaning you can mail a cheque or provide a debit payment rather than expending time and effort moving yourself singly across distance to transact business. Stock brokers mainly facilitate "I'm gonna get rich buyin' some stocks!", which has merit only as far as an entertaining and skill-based winnable game (see: Poker); stocks only provide economic benefit in the event of an IPO, where the public is given an opportunity to invest in a company--not necessarily put money in and expect more money out, but at the very least put money in because the company is doing something they think will benefit them (produce wealth in society).
For example when a student takes out a school loan, the goal is that the wealth of the knowledge the student gains is more valuable than the money spent on the loan. If it is not, then the student's loan was not a good decision.
Fair point. Opportunity value versus opportunity cost. It's mishandled today, and student loans are a terrible example for many reasons. Mortgages pre-FDR accomplished what you described because they were shorter-term; but post-FDR loans have been money sinks where the total cost of a home is ridiculously high.
Universal higher education--beyond basic math and science and technical skills (computers, etc.)--causes a situation in which students must speculate on the future of the job market, typically resulting in demand booms for certain vocational education (degrees) followed by flooding the market with people who mainly can't get jobs. Non-defaultable loans to facilitate this result in huge economic damage; government-funded "free education" tends to require government-mandated quotaing (restricts the economy) or run as a free-for-all with the same practical risks but the direct financial impact spread to the tax base. Typically the end result is a major increase in inequality between the rich and poor, with the less affluent winding up in dead-end careers and/or massive debt.
A lack of universal higher education creates an economic crisis: only rich kids can afford vocational education, so non-rich people are left behind. Unfortunately, businesses have trouble reaching their strategic goals: they can bid $250,000 for computer programmers and $400,000 for Photoshop experts, but they still won't find enough in the market to actually carry out business activities. Universal education creates a great supply of cheap skilled labor, not only reducing the per-seat cost but also allowing businesses to actually fill the number of seats they need. Sans this, businesses would have to ... wait for it... INVEST in raising educated, less-affluent applicants from a secondary (high school) or post-secondary continuing education (basic college math and science) level to a vocational level. In this scheme, the businesses take on the risk, aiming for a lower total cost per skilled laborer and a virtually limitless pool of skilled labor.
You compare the opportunity cost of a loan with the opportunity cost of businesses paying to train their own laborers. Investing with leveraged funds is very much more difficult than investing with direct funds, carrying higher risk and higher costs.
Are you aware of the term falsifiability? Lets say hypothetically this was incorrect, what might be some hypothetical evidence to show that it is wrong?
Support my political activism on Patreon.
Investment in the stock market moves wealth; it does not create it. In our current system, investment in the stock market decreases wealth: broker's fees and taxes are taken from the movement of wealth in a system that doesn't actually create anything.
The owners of stock are the collective owners of a company. They vote on board members which decide things like who gets hired for high ranking positions in the company and how much they are paid, and ultimately what direction the company is going.
It's a very juvenile perspective that managers don;t actually do anything and that it is only physical labor that creates wealth. It is very easy to waste human effort and create 0 wealth or even negative wealth without proper planning.
You seem to think that IPOs are a good thing, but part of what makes stock in a company valuable is the ability to sell it. If there were no stock market, IPOs would not raise as much capitol.
Stock brokers mainly facilitate "I'm gonna get rich buyin' some stocks!", which has merit only as far as an entertaining and skill-based winnable game (see: Poker); stocks only provide economic benefit in the event of an IPO, where the public is given an opportunity to invest in a company--not necessarily put money in and expect more money out, but at the very least put money in because the company is doing something they think will benefit them (produce wealth in society).
You seem to be confusing day trading as the the entire stock market. The ability to buy and sell stocks creates liquidity of ownership. Without this, you will be more likely to have people who don't want to manage or own a company stuck doing this job.
Universal higher education--beyond basic math and science and technical skills (computers, etc.)--causes a situation in which students must speculate on the future of the job market, typically resulting in demand booms for certain vocational education (degrees) followed by flooding the market with people who mainly can't get jobs.
There is no crystal ball to tell us what skills will be in demand in the future. Our education system doesn;t create this burden for students. That burden is there by default. Even if education were completely publicly funded, this would only increase the liklihood of people choosing to learn a low demand skill. While their individual financial status won;t be as negatively effected by debt, this will result in higher taxes for the rest of society to pay for useless education.
Furthermore, I just used a student loan as an example of how loans *can* create wealth for everyone involved. I was not defending the American education system.
A teenager who cuts the neighbor's grass for $20 spends less than $20 on the gas and lawn mower, and is doing so to get money for purchase of other goods; he has/is a business, and supplies himself employment. As such, businesses bring in more money than they output--they concentrate wealth.
The teenager is not concentrating wealth. The teenager is converting his labor into the goods he wants (e.g. new clothes). This is no different than a farmer converting his labor to things he wants.
Money is just a tool for trading goods and services. You could ignore all the money that exchanges hands, and what you would see is a society with a bunch of people producing and consuming at different levels. They don't spend a lot of time figuring out whether the trades are fair or not, because money makes this calculation easy.
It is only natural that people work to enrich themselves; this comes always at the expense of depriving others of wealth.
It sounds like it is *you* who are arguing that everything is a zero-sum game.
Can we reach a situation where we can actually avoid all these failure modes perpetually?"
You claimed to already have the answer. You said *ALL* economic systems will eventually collapse.
The owners of stock are the collective owners of a company. They vote on board members which decide things like who gets hired for high ranking positions in the company and how much they are paid, and ultimately what direction the company is going.
First off, nobody actually calls in voting rights. Second, I have had voting rights in 2 companies; I have held stock in 34. Common stock doesn't always convey voting rights. Third, common stock can be cancelled.
It's a very juvenile perspective that managers don;t actually do anything and that it is only physical labor that creates wealth. It is very easy to waste human effort and create 0 wealth or even negative wealth without proper planning.
Managers provide extremely important functions at all levels. Executive Management provides integration of various aspects of business with the business strategy, for example a CISO providing risk assessment and action as a top-level priority in the execution of the overall business plan rather than people at the bottom in IT crying that "OUR SECUR NETWURK R FUKED IT GUNNA GET HAXED" and nobody gives a shit. Middle managers provide a valuable communications channel down to functional managers, who determine what their functional areas require in terms of resources to perform operational duties and supply services to the rest of the business.
That said, businesses still concentrate wealth in the business and in the personal funds of managers. Similarly, having children is important for continuation of the species; but we are overpopulating the planet and destroying it and we need to scale that back a bit. When 7 billion becomes 185 billion on this one little rock, there won't be any continuation of the species.
You seem to think that IPOs are a good thing, but part of what makes stock in a company valuable is the ability to sell it. If there were no stock market, IPOs would not raise as much capitol.
I said IPOs are the only wealth-generating function of the stock market. There are other implications; ideally the stock market functions as a method of transferring partnership with a business, but in practice it doesn't. Part of this is because you don't trade preferred on the open market, and common can be sold without conveying voting rights. Common has historically carried unexercised voting rights; but these days I see a lot of non-voting shares.
You seem to be confusing day trading as the the entire stock market. The ability to buy and sell stocks creates liquidity of ownership. Without this, you will be more likely to have people who don't want to manage or own a company stuck doing this job.
This is a pile of nonsense. Non-public companies are bought and sold all the time.
There is no crystal ball to tell us what skills will be in demand in the future. Our education system doesn;t create this burden for students. That burden is there by default.
The burden is not there by default because by default vocational education is not accessible to the vast majority of the public. In ages past, in "the good old days", in times long forgotten, there was this thing called "Apprenticeship". We still have it in some places, but now you must have vocational education before apprenticeship. Prior, apprenticeship was the only form of vocational education. In this form, a guild or a business or a certain skilled tradesman would obtain vocational aid from an unskilled entrant laborer, transferring vocational skills upon them. In this way, the market demand for a skill creates a demand for the unskilled to take up such vocational apprenticeship, such that only so many as needed to aid those already in the profession will be taken up.
In other words, the history of vocational education has been that people got jobs relieving skilled tradesmen from performing low-skill labor, providing an immediate increase in labor ca
Support my political activism on Patreon.
First off, nobody actually calls in voting rights. Second, I have had voting rights in 2 companies; I have held stock in 34. Common stock doesn't always convey voting rights. Third, common stock can be cancelled.
It's as if I say "The voters decide the winner in an election", and you say "Almost nobody actually votes", as if this is a rebuttal to my statement.
I said IPOs are the only wealth-generating function of the stock market. There are other implications; ideally the stock market functions as a method of transferring partnership with a business, but in practice it doesn't.
Using your logic I could say that IPOs don't generate any wealth either. They just tranfer wealth between the current owners of the company and the new shareholders.
You seem to be confusing day trading as the the entire stock market. The ability to buy and sell stocks creates liquidity of ownership. Without this, you will be more likely to have people who don't want to manage or own a company stuck doing this job.
This is a pile of nonsense. Non-public companies are bought and sold all the time.
Did I say that *no* public companies are ever sold? No I said that without a market, less companies will be sold. Reading comprehension...
The burden is not there by default because by default vocational education is not accessible to the vast majority of the public. In ages past, in "the good old days", in times long forgotten, there was this thing called "Apprenticeship"
So what stops a kid from deciding to spend 10 years learning blacksmithing right before this skill becomes useless in the face of industrialization?
You keep changing your story. You say this:
It is only natural that people work to enrich themselves; this comes always at the expense of depriving others of wealth.
and then you say
Wealth is created, wealth is transferred. If you create $10 of wealth but you derive $15 of wealth from others who you pass it on to--i.e. you farm wheat, you've created food--you've both increased the wealth in a system and deprived others of wealth.
In other words enrishing oneself does *NOT* *AWLAYS* come at the expense of depriving others of wealth!!!
I can't have a discussion with someone that doesn't know what the fuck they are trying to say, and constantly contradicting themselves.
You make these ridiculous "all" or "never" absolutist statements. You: "All bears are brown!" Me: "What about polar bears?", You:"All bears are brown *AND* sometimes they are white".
you go off on these crazy irrelevant tangents that have nothing to do with anything I have said
Why are you talking about sustainability of natural resources? Did I ever claim that we have unlimited resources?
You need to figure out what ever it is you want to say, and try to say it in a clear and concise way. They way you have a discussion, it's like trying to argue with a schizophrenic person. You're all over the place. It's like you are completely ignoring what I am saying and arguing against a different person.
I'm done.
It's as if I say "The voters decide the winner in an election", and you say "Almost nobody actually votes", as if this is a rebuttal to my statement.
That's actually important here because people allegedly pay for the right to vote. It's also like saying you bought a car and pay for car insurance but you take public transportation and never drive: why did you buy a car? By contrast, being a citizen of the United States of America automatically means you can vote for free, without paying for it.
Secondly, you skipped the part about some stocks having no voting rights so what the fuck are you buying?
Using your logic I could say that IPOs don't generate any wealth either. They just tranfer wealth between the current owners of the company and the new shareholders.
The difference is people buy and sell stocks to trade money between individuals or groups attempting to capitalize on the undervalue/overvalue of those stocks. This doesn't encourage any other business activity. IPOs are businesses raising capital to engage in business activity: it funds research and development, production, expansion, and so on.
So what stops a kid from deciding to spend 10 years learning blacksmithing right before this skill becomes useless in the face of industrialization?
You don't understand risk, do you? Probability versus Severity. Risk is lower when either of these is lower. So what's the probability of an industrial revolution, versus the probability of an upsurge of labor in a market that disconnects the production of skilled labor from the demand driver?
Historically, college education at student discretion has produced repeated cycles of skilled labor scarcity followed by overabundance; whereas vocational education driven directly by employers has produced faster reaction to skilled labor scarcity, resulting in a reduction of severity--the demand doesn't build out of control because demand immediately causes production of skilled labor, and the supply doesn't build to excess because skilled labor supply is essentially directly commissioned by the consumer.
The historical factors show that the amount of risk in an employer-driven skilled labor system is lower. Importantly, though, the risk is on employers: you could be trying to train, at your expense, a retarded monkey. In the modern system, the risk is higher *and* it's mainly offset onto students, so employers don't have to suffer direct risk; it's debatable if the system puts more risk overall on employers as well, since they can be subject to a supply shortage of skilled labor at any time. On the other hand, their risk management plan may include "train some people to be programmers if there aren't enough programmers and they all want $200k", so they effectively have a mitigation plan that allows them to reap the benefits without facing consequences.
If you create $10 of wealth but you derive $15 of wealth from others who you pass it on to--i.e. you farm wheat, you've created food--you've both increased the wealth in a system and deprived others of wealth.
In other words enrishing oneself does *NOT* *AWLAYS* come at the expense of depriving others of wealth!!!
Uh, I said that people try to "profit" by creating something worth less than what they sell it for--that they transfer to you a thing worth something like $10 but make you pay $15 for it, so you are less wealthy and they are more wealthy. And you use this as an example of not depriving others of wealth? Are you going to use contracting HIV in Africa as an example of having sex without getting an STD next?
Let's break it down: "you create $10 of wealth"--you have a thing worth essentially 10 dollars. "You derive $15 of wealth from others who you pass it on to"--you sell it for 15 dollars. The person who receives it is, essentially, 5 dollars less wealthy. They are deprived of 5 dollars of wealth.
To this you say:
In other words enrishing oneself does *NOT* *AWLAYS* come at the expense of depriving others of wealth!!!
Is English not your first language?
Support my political activism on Patreon.