Congressman Accepts BitCoin For His US Senate Run

SonicSpike writes "U.S. Representative Steve Stockman, a vocal opponent of Federal Reserve policy, told reporters that he wants to promote Bitcoin, whose most fervent evangelists tout as an alternative to fiat currency. To do so, he is now accepting Bitcoin for his Senate campaign against incumbent John Cornyn of Texas. The announcement was made last night at the launch event for the NYC Bitcoin Center, located just up the street from the New York Stock Exchange. Center founder Nick Spanos a real estate developer and Bitcoin enthusiast says the Center itself is still in something of a planning stage, existing more as a statement about Bitcoin itself, though he plans on hosting a hackathon later this month."

Comments

I like the idea

[wbr1]

I like the idea of crypto currencies, but many of these news articles seem made to fuel further speculation in the market. It needs to become less speculative and more stable to be a true alternative.

Re:I like the idea

[jeffmeden]

It needs to become less speculative and more stable to be a true alternative.

It cannot become more stable. The supplies of BTC are limited by design. As BTC is used more and more in the world trade, each BTC keeps increasing in price. This is on top of the built-in deflation in a market of fixed size. This is why it cannot be used as money. Nobody wants to part with something that becomes more expensive as you hold it. There is an awful amount of USD in circulation, and only 21 million BTC. If you replace all USD with BTC, each BTC would cost a million dollars, and you'd run out of divisibility of BTC, and the "small" payment fee would be unaffordable. Also, BTW, early adopters would own half of he planet's wealth.

The reason it can't become more stable (with a click of a button) is that not enough people use it. Deflationary and supply issues aside, there just isnt enough capitalization (with respect to other currencies) to prevent huge swings due to speculation. But contrary to the original assertion about "too much speculation", if enough _more_ people were speculating (raising the value and volume of daily trades), you would see it stabilize compared to the current roller coaster. Bitcoin is like a micro crude oil market; big speculators can drive it any way they want, and since the total capital (relative to USD) in bitcoin is so low, a single heavyweight speculator can run the show.

Re:I like the idea

[squiggleslash]

You're describing the theory. You'd be better off investigating why the theory is wrong than repeating it blindly, pretending it's right.

FWIW, the GP actually gave an answer, essentially the unconstrained speculation that you're seeing. It's probably not the only reason Bitcoin's far from stable, but it's certainly likely to be a major contributing factor.

Re:I like the idea

[higuita]

the divisibility of bitcoins is set on the current version of the protocol and can be increased any time with a update version. the protocol already had several updates, one of then a mandatory update to solve a large block fork issue

Re:I like the idea

[jythie]

Well, stability is relative. Something can have built-in deflation (or inflation) and still be stable enough for use as a currency. Right now BTC is not, but it is quite possible that even with a steady increase in value it could be stable enough to plan with. In a way that is, in theory, one of its advantages. Since the rate of increase of supply is known ahead of time it should be possible to plan accordingly just like today long term contracts take USD's estimated rate of inflation into account.

However, the ecosystem around BTC is way too unstable for that kind of planning.

Re:I like the idea

[ultranova]

The problem with that line of though is there is a wealth of empirical data to back up the theory.

There's a wealth of empirical data to back almost any economic theory. When you have the entire history of the world to draw from, you will find examples of "condition A is true, then B happens" for almost all values of A and B. On the other hand, every situation is unique, so you can't really isolate the causal relationship between A and B. And on the third tentacle, people have money riding on convincing others (and often themselves) that such causal relationships exist or don't exist. The end result is that economics is a hopeless, confused mess with zero predictive power.

By all means

[i kan reed]

Let's make it so it's even harder to tell who's bribing their way into power in Washington.

Re:By all means

[travdaddy]

Campaign donations are subject to federal reporting regulations regardless of what currency they use.

Which raises a question. So if someone anonymously dumps 1000 bitcoins on him, then what happens?

Re:By all means

[TheCarp]

Wait, you mean the people who write the laws leave themselves major loopholes? I never would have guessed that.

Re:By all means

[jeffmeden]

Campaign donations are subject to federal reporting regulations regardless of what currency they use.

Which raises a question. So if someone anonymously dumps 1000 bitcoins on him, then what happens?

He has to not spend it, or run afoul of the FEC for not having his campaign funding papered up nicely. Now if they give it to a superpac, and that superpac goes and gets him elected with a billion dollar campaign, no one could care less.

Re:By all means

[Ralph Wiggam]

What does that have to do with bitcoin based campaign donations?

Re:Colour me confused

[randomErr]

Here's a two sided argument on the subject:

http://www.zerohedge.com/news/2013-12-30/bitcoin-alternative-currency-libertarian-vs-pragmatist

Re:Colour me confused

[Anonymous Coward]

We are talking about Steve Stockman. Even most of the Republican crazes think he is out in lala land.

Isn't it nice?

[TheloniousToady]

Isn't it nice that Bitcoin can be used to buy both drugs and Senators?

Re:Isn't it nice?

[CanHasDIY]

Considering that what you wrote looks like something the bastard child of Yosemite Sam and Foghorn Leghorn would say, you should be sorry.

I'd be more impressed if I saw

[future assassin]

US Representative refuses all donations to his campaign.

Re:I'd be more impressed if I saw

[CanHasDIY]

Isn't the point to try and improve the situation?

If we really wanted to improve the situation, we would set the system up so that there is no such thing as buying favors, er, I mean "campaign donations," and instead have all 'bona fide candidates,' i.e. people who get on enough state ballots, get X amount from the Federal Campaign Commission, not a penny less, not a penny more.

Or something to that effect.

Re:Speculation will never go down

[TheCarp]

Sure it has issues, even compared to cash but... cash can't be used for online purchases either. I don't think it is a problem if one currency isn't the perfect solution for all problems. Is it really a failure of one currency if it only fills in a niche? Do you really think the niche of providing online transactions to people who are distrustful of other currencies is a failing?

As a niche market, I think bitcoin works pretty well overall and fills in a real gap between cash and traditional bank mediated transactions.

Re:Colour me confused

[jeffmeden]

rather than Nature regulating it with a fixed amount of, say, gold, or any other naturally occurring element that has it's own value (gold is a super-conductor).

I know you meant "gold is a super good conductor" (gold has not been demonstrated to be a superconductor under any condition) but either way that raises one pointed problem; what happens to semiconductor manufacturing if the value as a currency (in other words the need to store value in it) gets too great? Are we supposed to just stop making CPUs (or make CPUs that are 5x or 10x more expensive) just because someone decided that gold was pretty enough to base an economy off of? Or do we just give up having fast CPUs and go back to (shudder) copper?? It is this very property (its central place as a commodity) that would give me the strong opinion that it should not be used as a currency at all.

Serious answers only, please.

Re:Colour me confused

[Trepidity]

His main argument seems to be that John Cornyn (R-TX) is too liberal, so he's challenging him in the primary.

Also, the U.S. Constitution is too liberal for Stockman, so he wants to amend it in like five different ways. Oddly, given his claim to be some kind of individual-liberty crusader, the ways he wants to amend the Constitution are mostly in the direction of removing individual rights, in favor of giving the government the power to enforce his own particular ideas of collective morality and cultural norms. For example, the Constitution currently guarantees that all native-born Americans are U.S. citizens. Automatically, by right: no federal-government bureaucrat had to confirm my right to be an American, after I was born in Indiana. Stockman doesn't like this. What if some of these Americans aren't enough like him? Shouldn't they have to take a test devised by federal bureaucrats showing their cultural conformity before they're allowed citizenship? Stockman says yes!

Oh, and that First Amendment is a big problem for him. Protects too much liberal nonsense in his opinion. I mean freedom is one thing, but isn't there such a thing as too much freedom? When people do things that offend Steve Stockman, like burn the American flag, well that's just a step too far. Better amend the Constitution again to remove those rights.

Federal Elections Commission Response?

[Bob9113]

This is interesting in light of the recent story stating that the FEC Will Not Allow Bitcoin Campaign Contributions. Maybe the candidate doesn't read Slashdot. I look forward to hearing the FEC respond, and how much of a fuss this guy is ready to make.

Re:Liberal tears make the best lube

[Mononoke]

Yup. I'm on his mailing list. I didn't win the AR-15 he allegedly gave away, but the emails are often humorous:

Dear patriot,
Well, I did it again.
Every gun grabber called my office yesterday screaming and crying because I posted this to our website.
Yes, I find liberal tears to be the best gun cleaner.
Now that's funny.
But you know what would really have gun grabbers dabbing their eyes with their petticoats?
If I were to run this campaign for U.S. Senate.
So let's give them something to cry about.
Today is the last day to accept donations for this period, so I need you to act NOW...

Re:Colour me confused

[JoshWurzel]

First, copper is a better conductor than gold (~16 nOhms/m vs. ~24nOhms/m, lower is better). Gold is primarily used as plating because it doesn't corrode. But that doesn't really impact the value of your question.

When a core material like gold changes price, the impact to the consumer depends on the rate and absolute value of the price changes.

If the total impact to the product's price is small or sudden, then it is either passed on to the customer or absorbed by the manufacturer. There isn't a lot of gold in a typical consumer product, for example, but there is enough to make a wild swing in gold prices noticeable to the supply/operations groups.

If the price increase is really large or forecast to take place over an entire product development cycle, then the designers will take a long look at the tradeoffs and decide if they want to make a cheaper product or a more expensive product.

Re:Speculation will never go down

[tlhIngan]

BTC does not fill any niche. What is it that BTC allows me to do that I cannot do through the bank, using any currency of my choice?

Semi-anonymous donation.

Think of it now - this guy now has a way to basically fund his campaign without oversight. Sure, he can report all his BTC dealings on his public wallet, but he can always create another wallet for those "special interests" that want to bypass any election fundraising laws. And since BTC's blockchain only tells you which wallets were used, he can probably transfer the money to separate exchanges and no one is the wiser that $BIG_CORP just sent him $100K.

Of course, it could be used for good, but that makes assumptions that BTC doesn't guarantee.

OTOH, use US dollars and things have a way of revealing themselves.

Bank Specie

[plopez]

Bitcoin reminds me of the bank specie circulated in the 1800s. Banks would accept legal tender, i.e. gold and silver, as deposits ad then print up specie redeemable at only that bank to be redeemed. If someone accepted it it could be used as de facto currency. There was nothing preventing it from being rejected for payment or banks printing up much more specie than they had deposits for. It was responsible for several major crashes when there was a run on specie and it was discovered the banks could not cover all of the debts or would only redeem it at a fraction of its supposed value.