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2364d · Capitalism
Banker's will weld bitcoin just as strongly as fiat. Bitcoin once loaned, becomes debt money. It makes no difference.
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replied 2363d
& I have to trust the person issuing steak credits can actually give me a steak. Similarly the person I trade with must trust the lawn mower.
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replied 2363d
Not exactly, Locally your credit wouldn't be accepted nationwide. The bigger the business, the farther its credits will be accepted.
replied 2363d
Yeah thats the point. I have local steak credits & I want to trade with someone else’s local lawn mowing credits. Local makes the issue worse.
replied 2363d
90% of credits traded would be national producer credits. Think Safeway, Walmart, or Lowes. Everyone would need Food or housing, so the day to day trades would be in these tokens.
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replied 2363d
& what prevents me from making fractional loans backed by safeway credits?
replied 2363d
Producer credits have a claim date to prevent the re-loaning process. Credit is created, circulated as money, then extinguished when the Good or Service is claimed.
replied 2362d
If the claim date is 1 year (as in the Toyota example) that is enough time to re-loan it out.
replied 2362d
The video i sent earlier explained how loans would operate in the system. It would be self balancing unlike now.
replied 2363d
so you still need brokerage between these with routing between them, accounting for their trustworthiness. not to mention these companies dont specialize in money creation/management.
replied 2363d
Bitcoin with colored coins would manage much of this. Since your very interested in this new form of money, this video explains the details.
TrashPosterInTheDark
replied 2363d
Relevant topic: https://memo.cash/topic/Biggest+Scam+EVER
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replied 2362d
& you still have the routing problem.
replied 2362d
Its p2p on Bitcoin. There is no routing, only mining of the token ontop of GROUP or OP_RETURN.
replied 2362d
Sure you can make colored coins but their supplies will be in constant flux. Their values determined by the trust in the issuer (nebulous, difficult to determine) & the number of coins
replied 2362d
You trust walmart to have goods in supply? I believe their credit would be very trustworthy and less fluctuating than crypto markets are.
replied 2362d
money "backed by a commodity" just means people are willing to trade money for that commodity at a price. that is already the case for anything you can buy.
replied 2362d
Not even close. The Money is a third party utility, while producer credits are priced in money, they are not money itself. This small difference is the key.
replied 2363d
Bitcoin becomes the underlying asset which the debt can be settled or forgiven, but the Bitcoin itself is independent on any debt begin created or repaid/forgiven/defaulted.
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replied 2364d
Not being able to have daddy Federal Reserve print you money when you fail may make banks more responsible when using bitcoin. That might make them not too quick to adopt it.
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replied 2363d
Also, if they lent out Bitcoin directly, not as a basis for their reserves, it would be impossible for them to do fractional reserve banking. Would require an extremely low deafult rat
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minkaminka
replied 2364d
I think the issue is youth. lol irresponsible youth.
replied 2363d
The solution is to not create any more youth, no more babies, no more worries.
minkaminka
replied 2363d
Creation of babies is the single only true 0-1 creation. Everyone has a shot at experiencing that. Some people experience it early with a good innovation or idea.
replied 2364d
Doesn't matter what type money it is. Once you loan it out, it becomes debt. That money can then be reloaned again, making more debt. Please read the article posted.
replied 2363d
A correction, it is not possible to do do fractional reserve lending with Bitcoin as in lending out more Bitcoin directly than you have. You need to give IOUs with Bitcoin as reserve.
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replied 2363d
Banker understand this. The single BTC can be re-loaned multiple times. John to charlie to mike then frank. 1 BTC passed hands in the loan but created 3 BTCs worth of Debt.
replied 2363d
The reason banks could issue so much debt with fiat, gold, silver, salt, seashells is because paper IOUs are easier to use. BCH IOUs are not easier to use than BCH.
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replied 2363d
I tried explaining this to him earlier, but maybe you'll get through to him.
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1,052
replied 2363d
Have you tried carrying a full scale desktop to your local store, set it down, plug it in, connecting the cables, synchronize the node. It is a real hassle, BCH IOUs (Tabs) way easier.
replied 2363d
I keep an all-in-one rigged to a car battery strapped on my back whenever I leave the house. A real man uses nothing less than a full node.
replied 2363d
That is where the Bolt11 address LN name comes from, a reference to the nuts and bolts of battery packs on the backs of real mean, and the LN get its name from the sparks of the plugs.
replied 2363d
I misspelled men as mean, a Frankenstein(s) monster of the singular and plural form of the word, squish men and man together and you get mean.
replied 2363d
lol thanks, just slogged through a "resource based economy" with lightrider, now this. where do these proposals come from?!
replied 2363d
Banks would have to print notes (which no one would trust) that say they are worth one BTC.

And if a depositor at the bank tried to withdraw the one BTC, the bank would be insolvent.
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replied 2363d
This is simple lending. :) John lends to charlie then charlie lends to bob. 1 BTC has created 2 BTC's worth of Debt Contracts that need to be paid on time. This is Debt money.
replied 2363d
And then when depositors withdrew the money proper, bye-bye bank.
replied 2363d
No, the bank would collect Charlie and Bob Houses from the default on the 1 BTC. They didn't print money, they created Debt money contracts. They did this with Gold for centurys.
replied 2363d
Debt money contracts are bank notes. Good luck getting someone to accept a Bitcoin bank note, when it offers no more convenience over using BTC. People wouldn't trust it.
replied 2363d
Among other things, Bitcoin can be proven and trusted with POW and audited and traced with the transparent blockchain.
replied 2363d
Think a loan, a promise to pay BTC in this amount of time. Its not money, but it is DEBT. They did not print anything but created 1 BTC worth of debt through the loan.
replied 2363d
Whoever purchases the debt (you're referring to trading debt) assume the risk of the loan defaulting. You couldn't use these contracts to purchase goods. Only to cash in on the debtor.
replied 2363d
- A better explanation of perpetual debt.
replied 2363d
Nobody would trust a Fiat note backed by BTC. Nobody would accept the debt money.
replied 2363d
Without spending, the BTC can pass back up the chain of debt. With spending, the BTC to repay the debt must come from elsewhere.
replied 2363d
True but once that BTC hits a savings account or the bank doesnt lend it out, Its no longer available to service the Debt contracts payable only in BTC.
replied 2363d
You are describing fractional reserve banking, which can be done with anything in theory. But there is no Bitcoin press in case of a run on the banks.
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Simon Van Gelder
replied 2363d
Who in their right mind would loan money that can't be recouped via law?
replied 2363d
Exactly the point. The real value is the collateral, not the money. :) If you can restrict the money circulating via loans, you can collect collateral.
Simon Van Gelder
replied 2363d
I see. Do you agree that Crypto has the possibility to be a positive asset, and not just be "good for all debts, public and private"?
replied 2363d
Bitcoin as money wont break the bankers debt money system, Tokens ontop of bitcoin will through self issued credit.
Simon Van Gelder
replied 2363d
Do you see Bitcoin as money gradually superseding the "debt money system" due to efficiency (if not destroying it entirely)?
replied 2363d
Gold, Bitcoin, salt anything that is a Uniform, single commodity given its Value by its Scarcity (or abundance) can become debt money. People will have to issue their own credit.
Simon Van Gelder
replied 2363d
Wouldn't that just perpetuate the debt? Wouldn't a more sensible solution be to reject lending entirely?
replied 2363d
Self issued credit backed by the persons or businesses promise of Goods or Services only is the only way to end debt money.
Simon Van Gelder
replied 2363d
Do you want slavery? Because that's how you get slavery.
replied 2363d
I disagree. How so?
Simon Van Gelder
replied 2363d
Enforcing delivery of a service is essentially slavery, unless I am missing something.
replied 2363d
Only if you yourself promised issued a credit to do so. Its 100% voluntary.
Simon Van Gelder
replied 2363d
Slavery agreed to in the past is still slavery.
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replied 2363d
If you call free will slavery, then we are all slaves.
replied 2363d
Good thing nobody is calling free will slavery. Human will is, however, inalienable. If I agree to work 5 days for 100 dollars, I can leave in 4 days with 80, if I am free.
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minkaminka
replied 2363d
"Free" is when you put energy in things that interest you. Responsibility may be one of them for some people. There's also a level of suffering that comes with ultimate freedom.
replied 2363d
Then there is not difference than pricing your labor in credits you yourself own and produce. Which is not controlled by those who control the money your labor is priced in,
Simon Van Gelder
replied 2363d
Yes it is: you get paid after the work, not before.
replied 2363d
If you break your promises of labor in a credit system, no one will accept your credit anymore and become bankrupt until you can return to good credit. Its all on you keeping truthful.
Simon Van Gelder
replied 2363d
And what, pray tell, must someone in "bad credit" do to restore credit? By doing the work originally promised?
Simon Van Gelder
replied 2363d
And you have the option of changing your type or application of labor (not a coal-miner for ever).
replied 2363d
Changing employment wouldnt be affected one bit. You would be paid in the credits (think of stock.) of the company you work under.
Simon Van Gelder
replied 2363d
I don't work for coupons. That's a very ruff sell.
replied 2363d
also, in your bio think you mean Bitcoin will become the prison of our *grandchildren* not forefathers. can be a prison in the past/before it was created.
replied 2363d
Our forefathers were imprisoned by Gold, we are returning to that same prison with Bitcoin. Banks will still wield BTC as Debt money.
replied 2363d
Banks and governments, and others looking to create something out of nothing, were restricted by gold.
minkaminka
replied 2363d
You are starting a thread on fundamentals in the psychology of wealth-building. Gold is important as BTC is important because man has fear. Fears are subsided with a form of security.
replied 2363d
To add to that, man holds a cash balance to prepare for uncertainty.
minkaminka
replied 2363d
There's always uncertainty. Just makes us feel better. So, anything to mitigate risk and the feeling of suffering.
replied 2363d
Not exactly. You can still create debt money with Gold. Just lend 1$ to your friend and him lend it again and once more, congrats, you indebted 3$ of goods with 1$. No printing needed.
Simon Van Gelder
replied 2363d
You cannot give away freewill, even by virtue of freewill. Even slaves have freewill: it's just that it might not matter when they're perpetually indebted by their father's fathers.
replied 2363d
It sounds crazy to issue your own credit, but it makes sense.
&feature=youtu.be
replied 2363d
Wouldn't the free market decide the value of these tokens in Bitcoin?
replied 2363d
Its not a free market issue. Check out Moneyasdebt.net to understand better.
replied 2363d
It can be done with full reserves. I lend 1 BTC, you lend 1 BTC, then they lend 1 BTC. Now there is 3 BTC worth of debt on real goods, and 1 BTC to pay them. Default is inevitable.
replied 2364d
You can't loan more Bitcoin collectively than exists. And you can't print more to make up for it. The lending pool runs dry, it stays dry.
replied 2364d
You dont have to print it up. You loan me 1 BTC then i loan it again for 1 BTC. Now there is 2 BTC worth of DEBT in the system with only 1 BTC worth of money. Bankers revel in this.
replied 2364d
Well, ideally it should work like this:

1 BTC is lent by Alice to John

John re-lends it to Joe

Joe pays back john 1 BTC, who then settles his debt with Alice with that same 1 BTC.
replied 2363d
It does not matter how many people lend the single Bitcoin in a chain, the total amount of debt is still just one Bitcoin. What people mean when they say "Lend Bitcoin" is creating IOU
replied 2364d
Luis saves the 1 BTC. Now John and Joe Are screwed, they created 2 BTCs worth of debt, and its in luis savings. John and Joe lose their shirts.
replied 2364d
Alice to John then to Joe, but why would Joe borrow just to return the 1 BTC in existence? He wants to buy something. He buys a car, from luis. Luis saves the BTC.....
replied 2364d
But, this model is broken too, since this example hinges on the lenders and debtors owing the entire supply of the currency, which simply does not occur IRL.
replied 2364d
Its nor broken. Its the failure of the gold standard. Doesn't matter the amount of BTC in existence, It can grow infinitely in DEBTS it has to pay. I could loan 1 BTC to 10 BTC of debt
replied 2364d
So, what you are saying is we need to eliminate debt?
replied 2363d
Bitcoin with tokens is the solution. So business can color tokens redeemable in goods or services only. They become self issuers of credit.
replied 2363d
Isn't untokenized Bitcoin already redeemable in goods or services only? Or are you talking about making a gift-card esque economy where spending is restricted to specific applications?
replied 2363d
http://www.moneyasdebt.net/ - Self issued credit is explained better here. Bitcoin as a single uniform commodity money will fall into perpetual debt, just as gold did.
replied 2363d
Producer credit has default risk built in. Additionally, you have to trust random people or route trust through networks. Sounds like Lightning Routing.
replied 2363d
Say I have producer credits for lawn mowing, I actually want a steak. Now I have to hunt for someone with steak credits who wants lawn mowing credits.
replied 2363d
BCH is not made valuable only by it’s scarcity. Potcoin is scarce too.


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