Posted April 05, 2015
low rated
Buttcoin is not a motherfucking currency. It's a commodity. A currency has to be centralized and regulated.
Consider the US dollar. For all the whining about US debt, the US dollar is backed by the US' hueg economy, which is in turn backed by the US armed forces. To do business in the US and with the US, you often have to pay in USD. Which means there is a persistent demand for the US dollar: people like to buy things that are sold for USD, people like to receive the USD as payment because they know they are guaranteed to be able to exchange USD for goods and services they might need, and people have to pay taxes.
Now, there are quirks. As a consequence of an economic shock, a currency might become unbalanced. Suppose an economic downturn happens for whatever reason, and people stop buying stuff and start preferring to sit on their money. Producers of goods, then, are also incentivized to sit on their money, because a conversion of money into goods won't pay off in light of a decreased demand for goods. Thus, there's less money to go around, which means people are incentivized to sit on it even more. Production shuts down, the 99% is struggling to survive and has to empty their wallets. Eventually, the situation stabilizes with the poor becoming cripplingly poor and the rich becoming marginally less rich. Now, you'd think the rich would be strongly encounraged to conduct progressive economic policies which make them richer in //absolute// terms (that is in comparison to their past selves), but this happens to not be the case. "The rich" are ultimately people, and people are motivated by their base emotions, and if Potanin gets a bigger kick of overtaking your Ziguli on his Ferrari than overtaking your Honda on his Swarovski-studded Tesla DeLorean, you're fucked.
The solution to this is government regulation. It's by no means a new idea: one of the first successful examples is found in the Bible (sadly and hilariously, Christian parties everywhere do exactly the opposite). Ideally, the government is elected by you the people and is thus incentivized to conduct policies that lessen the impact of crises on the lower classes. Now, we happen to know it doesn't hold true in the majority of countries on the planet, certainly not in Russia. Still, even the Russian government is accountable to the people to some extent, because the oligarchs want to such the country dry, which will be over once it explodes, so they exert pressure on Putin to not let it happen. (Obviously, the lower the marginal cost of employing oppression, the greater the incentive to use it instead of progressive economic policies, and if the current trend continues, Russia is going to literally explode, because literally sprinkling the hallways of nuclear power stations with holy water isn't an evidence-based safety measure. Dig a fucking shelter and prepare to larp STALKER.)
Now, buttcoin is completely unregulated as a currency and unaccountable to anyone. Its claimed advatages to lay consumers are entirely fictitious; it loses to regular currency on every count. Anonymity? Bullshit. Buttcoin is not anonymous. All your transactions are public by design. If you want to buy a good or service with buttcoin, whoever supplies said service has to identify you //somehow// — you know, to actually provide said service to you. Security? Bullshit. Any and all attempts at implementing basic privacy, a staple of all modern currencies and modern life, involve entrusting your savings (and your privacy, duh) to third-party services such as shufflers. Decentralization? It's been a lie for quite some time already. That one big-ass swarm can now actually issue buttcoins rather than mine them. Which is actually an improvement, if they could be relied upon to be fiscally responsible — something that no one can force on them, because deregulation lololololol.
The population of Iceland, the whole country, is 300k. That's 50 times less than that of Moscow, a city. And yet they have their own currency, which is stable. Because it's used, and is guaranteed to be used in the future. People buy and sell stuff in ISK and they pay taxes in ISK. Now look how hard the 11-million-strong Greece is fucked, exactly because the can't print currency. Look at Russia, which used to be able to generate foreign currency via foreign borrowing but cannot do so anymore: the chunk of the economy which runs on foreign currency and required a regulated supply of it to function properly crashed the whole fucking thing.
The only way for buttcoin to become viable is to guarantee its use (which requires regulating its supply). Suppose the Winklevoss twins successfully sue Facebook off Zuck, buy that one big-ass swarm and introduce buttcoin as the official medium of exchange all over the social network: they could release into circulation and hold back any number of coins as the market demands, and it would be an actual currency that people will want to do business in. It's actually a fairly realistic situation except for the part where the twins have at least a single beain between them. Reported Facebook use is higher than reported internet use in a whole bunch of emerging countries, because smartphone use is on the rise, Facebook traffic is free, and within a HUEG shadow economy phone credit functions as currency. Because communication is a persistent need, and the demand for it isn't going anywhere.
I continue to be immensely puzzled by Russian fans of buttcoin. I suppose it's the outlet channel for the braindead protest vote. I see where it comes from — the supposed econ experts publicized by offline and online news outlets keep saying idiotic shit like "the proliferation of e-payment decreases inflation, because money isn't physically printed" and pine for the gold standard, and the Big Mac Index is reported as actual news. I have no doubt that ignorance is actually a job requirement for modern Russian econ commenters. But still... what the fucking fuck. You have a brain. You're on the internets. You can go ahead and compare the exchange rate — or better yet, the purchasing power — of the rouble and of the buttcoin. Notice that the currency of a country which is currently being robbed blind is //still// more attractive as a currency.
Fuck, remember the Suburban Train Affair and how people were able to bring back the trains by personally appealing to the Holy Emperor Vladimir Nevsky? And yet a whole lot of outraged folks are hardcore small-govt Libertarian fucknuts believing in the almighty free market. Want to know the free-market solution to suburban trains cancelled because of unprofitability? "Take a walk."
TL;DR buttcoins are a Ponzi scheme. People who make money off it are commodity speculators who benefit from wildly divergent rates at the expense of people who are ignorant enough to try to use it as a medium of exchange in their daily economic activity. Don't fall for scams.
This has been a public service announcement.
Consider the US dollar. For all the whining about US debt, the US dollar is backed by the US' hueg economy, which is in turn backed by the US armed forces. To do business in the US and with the US, you often have to pay in USD. Which means there is a persistent demand for the US dollar: people like to buy things that are sold for USD, people like to receive the USD as payment because they know they are guaranteed to be able to exchange USD for goods and services they might need, and people have to pay taxes.
Now, there are quirks. As a consequence of an economic shock, a currency might become unbalanced. Suppose an economic downturn happens for whatever reason, and people stop buying stuff and start preferring to sit on their money. Producers of goods, then, are also incentivized to sit on their money, because a conversion of money into goods won't pay off in light of a decreased demand for goods. Thus, there's less money to go around, which means people are incentivized to sit on it even more. Production shuts down, the 99% is struggling to survive and has to empty their wallets. Eventually, the situation stabilizes with the poor becoming cripplingly poor and the rich becoming marginally less rich. Now, you'd think the rich would be strongly encounraged to conduct progressive economic policies which make them richer in //absolute// terms (that is in comparison to their past selves), but this happens to not be the case. "The rich" are ultimately people, and people are motivated by their base emotions, and if Potanin gets a bigger kick of overtaking your Ziguli on his Ferrari than overtaking your Honda on his Swarovski-studded Tesla DeLorean, you're fucked.
The solution to this is government regulation. It's by no means a new idea: one of the first successful examples is found in the Bible (sadly and hilariously, Christian parties everywhere do exactly the opposite). Ideally, the government is elected by you the people and is thus incentivized to conduct policies that lessen the impact of crises on the lower classes. Now, we happen to know it doesn't hold true in the majority of countries on the planet, certainly not in Russia. Still, even the Russian government is accountable to the people to some extent, because the oligarchs want to such the country dry, which will be over once it explodes, so they exert pressure on Putin to not let it happen. (Obviously, the lower the marginal cost of employing oppression, the greater the incentive to use it instead of progressive economic policies, and if the current trend continues, Russia is going to literally explode, because literally sprinkling the hallways of nuclear power stations with holy water isn't an evidence-based safety measure. Dig a fucking shelter and prepare to larp STALKER.)
Now, buttcoin is completely unregulated as a currency and unaccountable to anyone. Its claimed advatages to lay consumers are entirely fictitious; it loses to regular currency on every count. Anonymity? Bullshit. Buttcoin is not anonymous. All your transactions are public by design. If you want to buy a good or service with buttcoin, whoever supplies said service has to identify you //somehow// — you know, to actually provide said service to you. Security? Bullshit. Any and all attempts at implementing basic privacy, a staple of all modern currencies and modern life, involve entrusting your savings (and your privacy, duh) to third-party services such as shufflers. Decentralization? It's been a lie for quite some time already. That one big-ass swarm can now actually issue buttcoins rather than mine them. Which is actually an improvement, if they could be relied upon to be fiscally responsible — something that no one can force on them, because deregulation lololololol.
The population of Iceland, the whole country, is 300k. That's 50 times less than that of Moscow, a city. And yet they have their own currency, which is stable. Because it's used, and is guaranteed to be used in the future. People buy and sell stuff in ISK and they pay taxes in ISK. Now look how hard the 11-million-strong Greece is fucked, exactly because the can't print currency. Look at Russia, which used to be able to generate foreign currency via foreign borrowing but cannot do so anymore: the chunk of the economy which runs on foreign currency and required a regulated supply of it to function properly crashed the whole fucking thing.
The only way for buttcoin to become viable is to guarantee its use (which requires regulating its supply). Suppose the Winklevoss twins successfully sue Facebook off Zuck, buy that one big-ass swarm and introduce buttcoin as the official medium of exchange all over the social network: they could release into circulation and hold back any number of coins as the market demands, and it would be an actual currency that people will want to do business in. It's actually a fairly realistic situation except for the part where the twins have at least a single beain between them. Reported Facebook use is higher than reported internet use in a whole bunch of emerging countries, because smartphone use is on the rise, Facebook traffic is free, and within a HUEG shadow economy phone credit functions as currency. Because communication is a persistent need, and the demand for it isn't going anywhere.
I continue to be immensely puzzled by Russian fans of buttcoin. I suppose it's the outlet channel for the braindead protest vote. I see where it comes from — the supposed econ experts publicized by offline and online news outlets keep saying idiotic shit like "the proliferation of e-payment decreases inflation, because money isn't physically printed" and pine for the gold standard, and the Big Mac Index is reported as actual news. I have no doubt that ignorance is actually a job requirement for modern Russian econ commenters. But still... what the fucking fuck. You have a brain. You're on the internets. You can go ahead and compare the exchange rate — or better yet, the purchasing power — of the rouble and of the buttcoin. Notice that the currency of a country which is currently being robbed blind is //still// more attractive as a currency.
Fuck, remember the Suburban Train Affair and how people were able to bring back the trains by personally appealing to the Holy Emperor Vladimir Nevsky? And yet a whole lot of outraged folks are hardcore small-govt Libertarian fucknuts believing in the almighty free market. Want to know the free-market solution to suburban trains cancelled because of unprofitability? "Take a walk."
TL;DR buttcoins are a Ponzi scheme. People who make money off it are commodity speculators who benefit from wildly divergent rates at the expense of people who are ignorant enough to try to use it as a medium of exchange in their daily economic activity. Don't fall for scams.
This has been a public service announcement.
