I'm not aware of any really rigorous data about the velocity of bitcoins, but Silk Road's revenue is believed to be about $1 million / month, while bitcoinstore appears to bring in something like 10% of that amount. If you have good data I'd love to see it.
Just wanted to clarify, as the implication was that the Fed is not part of the fed, because it is. Congress may make any change it desires in the nature of the US money system through acts of law.
Also, I have to say your understanding of QE is incorrect. QE does not add "new" money, it just creates an asset swap of one interest bearing debt instrument for another (albeit with a lower interest rate). The net effect is to decrease interest income to the private sector, and to decrease the primary federal deficit by the same amount (as those interest payments are now made to the Fed and then returned to the TGA).
TL;DR: securities are money. If you had $100 million in US securities you would not be poor. Fed insiders even refer to them as "securities accounts" because they are directly analogous same as a savings account in a regular bank.
In the Weimar Republic, inflation served to drive wealth towards real assets and therefore towards those who produced such assets. This effected a recovery - a "re-inflation" - of the German manufacturing sector. Then, once hyperinflation had done its job, they created a new currency based on debt issued by a land bank and backed by real assets. Yes, they could have done this without hurting workers so badly, if they had had superior social insurance.
People shouldn't forget that the gold coverage of the US dollar was always far less than 100%. The Swiss and French runs on US gold, leading up to the Nixon Shock in 1971, were triggered because the coverage became especially low as new money was being created to fund the war in Vietnam.
"Gold backed" always means "government guarantee," and even in the Middle Ages, state (or ecclesiastical) authority was always required for gold and silver coinage (which was worth its weight).
The price of oil is determined by Saudi Arabia due to their ability to arbitrarily constrain supply while demand is ever-increasing. And it doesn't matter if Bitcoin depreciates or not, since it is divisible and its value ultimately derives from its usefulness for making private transactions in secret.
You realize that without "money printing," growth requires private credit expansion, right? You're always going to need some amount of new money unless you want the average leverage to go up into the thousands and beyond, forever.
But most of that debt is owed to itself. All that says is that the private sector has leveraged the government issued money through its own private debt instruments.
Maybe it can be a "currency" if it is "current," but in general you are correct that Bitcoin is not really a debt instrument.
But the usefulness / real value of a Bitcoin comes from its putative secrecy with regard to private transactions. Prices just have to be stable over hours to days, and not go beyond the minimum / maximum prices imposed by the algorithm. I suspect that new secret currencies will come in to being once folks realize the various constraints are unnecessary.
During the early Middle Ages, precious metal currencies actually required state authority to be useful. Partially this was do to the inability of common folk to assay the purity of metals (although actually debased metals were more useful to the average person making small transactions), but largely it was because wheat, iron, and even informal debts, had far more "intrinsic value" than does gold.
The point was that the US dollar is backed up a monopoly on the use of force. Tax day is soon - you'd better have US dollars, and no other representation of value will do.
I think that the usefulness of a secret currency, which provides some additive value beyond the "standard," probably fluctuates significantly.
However, the actual price of Bitcoin has no import to use, because Bitcoin is denominated in arbitrary fractions. In ancient times, city-dwellers had to carry splinters of silver in their cheeks, because the useful amounts were so small.
I agree with this, however it neglects the actual intrinsic value of Bitcoin, which is its putative secrecy for private transactions. This type of purely transactional value is distinct from the character of government debt as a low-risk financial asset which can be held for long times.
And what makes people accept it is the big stick government wields.
You may wish to use other currencies for your day-to-day business, but come April 15th you'd better have US dollars to hand over, and nothing else will do. Thus, we (US taxpayers) go to great lengths to acquire US dollars specifically.
The thing about Bitcoin is that its exchange rate to the "real" currencies is irrelevant to its usefulness.
I think most users exchange e.g. dollars for Bitcoin, and then spend the latter as quickly as possible on (mostly) illegal goods. As long as Bitcoin can be obtained at all, the price is stable on the timescale of hours to days and secrecy is maintained, Bitcoin will be used.
In short, "currency" does not always need to represent debt (as do modern money and treasury bonds), or even to have the imprimatur of state authority, for it to be useful transactionally. Low-risk savings, of course, is another matter.
I had the same experience in university calculus and physics. Even for problems with one right answer, there are typically many (even infinite) ways of expressing that answer. Even something as advanced as Mathematica or Maple can be fooled, and the websites in question are no Mathematica.
Actually TFA asserts the telco is CREDO / Working Assets, which provides mobile and land-line services primarily to non-profits. Sonic.net was a good guess though, they have done similar things in the past.
Those are all real (as in non-trivial) problems which could be resolved by legal process.
Before deciding what makes a software a software or whether or not software can be patented at all, let's first require that patents including software 1) actually describe an algorithm and 2) are non-obvious to reasonable computer scientists.
Recall also that the current legal justification for software patents is the physically incorrect assertion that your CPU is literally mechanically rearranged into a new machine every time you run a program on it. Let's deal with these problems and if we still have troll issues we can consider next steps...
Slashdot Mirror
I'm not aware of any really rigorous data about the velocity of bitcoins, but Silk Road's revenue is believed to be about $1 million / month, while bitcoinstore appears to bring in something like 10% of that amount. If you have good data I'd love to see it.
Just wanted to clarify, as the implication was that the Fed is not part of the fed, because it is. Congress may make any change it desires in the nature of the US money system through acts of law.
Also, I have to say your understanding of QE is incorrect. QE does not add "new" money, it just creates an asset swap of one interest bearing debt instrument for another (albeit with a lower interest rate). The net effect is to decrease interest income to the private sector, and to decrease the primary federal deficit by the same amount (as those interest payments are now made to the Fed and then returned to the TGA).
TL;DR: securities are money. If you had $100 million in US securities you would not be poor. Fed insiders even refer to them as "securities accounts" because they are directly analogous same as a savings account in a regular bank.
In the Weimar Republic, inflation served to drive wealth towards real assets and therefore towards those who produced such assets. This effected a recovery - a "re-inflation" - of the German manufacturing sector. Then, once hyperinflation had done its job, they created a new currency based on debt issued by a land bank and backed by real assets. Yes, they could have done this without hurting workers so badly, if they had had superior social insurance.
The Fed has cabinet oversight. According the Federal Reserve Act, the Chairman is supposed to defer to the Treasury Secretary.
People shouldn't forget that the gold coverage of the US dollar was always far less than 100%. The Swiss and French runs on US gold, leading up to the Nixon Shock in 1971, were triggered because the coverage became especially low as new money was being created to fund the war in Vietnam.
"Gold backed" always means "government guarantee," and even in the Middle Ages, state (or ecclesiastical) authority was always required for gold and silver coinage (which was worth its weight).
The price of oil is determined by Saudi Arabia due to their ability to arbitrarily constrain supply while demand is ever-increasing. And it doesn't matter if Bitcoin depreciates or not, since it is divisible and its value ultimately derives from its usefulness for making private transactions in secret.
You realize that without "money printing," growth requires private credit expansion, right? You're always going to need some amount of new money unless you want the average leverage to go up into the thousands and beyond, forever.
But most of that debt is owed to itself. All that says is that the private sector has leveraged the government issued money through its own private debt instruments.
Maybe it can be a "currency" if it is "current," but in general you are correct that Bitcoin is not really a debt instrument.
But the usefulness / real value of a Bitcoin comes from its putative secrecy with regard to private transactions. Prices just have to be stable over hours to days, and not go beyond the minimum / maximum prices imposed by the algorithm. I suspect that new secret currencies will come in to being once folks realize the various constraints are unnecessary.
I thought the "cost" was "how much you pay," in which case it would seem that it is the cost which is defined.
People are often confused about these points.
During the early Middle Ages, precious metal currencies actually required state authority to be useful. Partially this was do to the inability of common folk to assay the purity of metals (although actually debased metals were more useful to the average person making small transactions), but largely it was because wheat, iron, and even informal debts, had far more "intrinsic value" than does gold.
The point was that the US dollar is backed up a monopoly on the use of force. Tax day is soon - you'd better have US dollars, and no other representation of value will do.
I think that the usefulness of a secret currency, which provides some additive value beyond the "standard," probably fluctuates significantly.
However, the actual price of Bitcoin has no import to use, because Bitcoin is denominated in arbitrary fractions. In ancient times, city-dwellers had to carry splinters of silver in their cheeks, because the useful amounts were so small.
I agree with this, however it neglects the actual intrinsic value of Bitcoin, which is its putative secrecy for private transactions. This type of purely transactional value is distinct from the character of government debt as a low-risk financial asset which can be held for long times.
And what makes people accept it is the big stick government wields.
You may wish to use other currencies for your day-to-day business, but come April 15th you'd better have US dollars to hand over, and nothing else will do. Thus, we (US taxpayers) go to great lengths to acquire US dollars specifically.
The thing about Bitcoin is that its exchange rate to the "real" currencies is irrelevant to its usefulness.
I think most users exchange e.g. dollars for Bitcoin, and then spend the latter as quickly as possible on (mostly) illegal goods. As long as Bitcoin can be obtained at all, the price is stable on the timescale of hours to days and secrecy is maintained, Bitcoin will be used.
In short, "currency" does not always need to represent debt (as do modern money and treasury bonds), or even to have the imprimatur of state authority, for it to be useful transactionally. Low-risk savings, of course, is another matter.
Gold has no "intrinsic value" either. The are valuable because an entity with a monopoly on the use of force insists that it is so.
I'm not sure the exchange rate of BitCoin matters to its users, though, since most acquire them only to spend them immediately on illegal goods.
The sad thing is that's how ETS already grades essay questions, only the "tokenizer" is an underpaid college graduate.
I had the same experience in university calculus and physics. Even for problems with one right answer, there are typically many (even infinite) ways of expressing that answer. Even something as advanced as Mathematica or Maple can be fooled, and the websites in question are no Mathematica.
I dunno, maybe there is a positive correlation between high health indicators and high desire for ephemeral things, like freedom.
National Association for the Advancement of Colored Programmers?
Oh yeah, all that horrible Cuban propaganda about their great health indicators...
Regardless of your political views, you should be impressed by Cuba's health indicators at least.
Actually TFA asserts the telco is CREDO / Working Assets, which provides mobile and land-line services primarily to non-profits. Sonic.net was a good guess though, they have done similar things in the past.
Those are all real (as in non-trivial) problems which could be resolved by legal process.
Before deciding what makes a software a software or whether or not software can be patented at all, let's first require that patents including software 1) actually describe an algorithm and 2) are non-obvious to reasonable computer scientists.
Recall also that the current legal justification for software patents is the physically incorrect assertion that your CPU is literally mechanically rearranged into a new machine every time you run a program on it. Let's deal with these problems and if we still have troll issues we can consider next steps...