Politics & Crypto

[CFordUNC]

 

[nycfan]

From Believers to Bitcoin: 24 Hours in Trump’s Code-Switching Campaign​

When Donald J. Trump tries to win over a crowd that is not inherently his own, the results can be awkward.

From Believers to Bitcoin: 24 Hours in Trump’s Code-Switching Campaign

When Donald J. Trump tries to win over a crowd that is not inherently his own, the results can be awkward.

www.nytimes.com

“… On Friday night, he appeared before religious leaders in West Palm Beach, Fla. The next afternoon, he was in Nashville, yukking it up with thousands of crypto-evangelists at a Bitcoin conference.

… His speech that night toggled between fire-and-brimstone and semi-desperate wheedling for votes. “I don’t know how a Catholic can vote for the Democrats,” he said, “because they’re after the Catholics, almost as much as they’re after me. I would say I top you.” He said that his new likely rival, Vice President Kamala Harris, “doesn’t like Jewish people,” even though her husband is Jewish.

…
The crowed booed when he said that he supported abortion bans that include exceptions for life of the mother, rape and incest. “I think it’s very important,” he argued, suddenly on defense.

“You do have to win elections,” he said. “If you don’t do certain things, you’re not going to win elections, and it will be a very Pyrrhic victory — it’ll be a victory that’s not really a victory at all.”

Some of the believers planning to vote for Mr. Trump confessed ambivalence. “I don’t think Trump’s perfect, he’s not Jesus, so best not to idolize him,” said John Clark, 26, a graphic designer from Minneapolis. “As much as he represents conservative values, he also doesn’t, in a lot of ways. Like, being, let’s say, hateful in some ways.” …”

 

[nycfan]

(Cont’d)

“… Now, he was preaching the gospel of crypto. “There’s never been anything like it,” he said. “Most people have no idea what the hell it is, you know that, right?”

It was an absurd sight: A Luddite who not so long ago instructed one of his aides to follow him around with a portable printer so he could read news off the internet in paper form was now extolling the wonders of Bitcoin, a digital currency he recently described as being “based on thin air.”

…
At the Bitcoin event, his grievances hung oddly in the air. At times, he halted for applause that never came. He talked of a stolen election only once, and quickly moved on.

But there were plenty of goodies that had been baked into his teleprompter speech to win over the crowd. Mr. Trump started tossing out promises: He said he would appoint a crypto advisory council (“Would anybody like to be on that council?”) and said he would create a “strategic national Bitcoin stockpile.”

… He swore he would fire Gary Gensler, the chair of the Securities and Exchange Commission who is the bête noire to all bitcoiners, and the room erupted. Mr. Trump was startled by the reaction.

“Wow, I didn’t know he was that unpopular! Let me say it again.” He repeated the line, and the room began to chant, for the first time, “Trump! Trump! Trump!”

At last, he had found a villain and the Bitcoin conference became a Trump rally.

“Oh, you’re going to be very happy with me,” he told the crowd. Mr. Trump said he would make America “the crypto capital of the planet,” and they roared some more. …”

 

[nycfan]

“… When he bid the group farewell, Mr. Trump acknowledged that he still was not of their world: “Have a good time with your Bitcoin and your crypto, and everything else that you’re playing with.” …”

 

[TarSpiel]

If I buy a bitcoin, I have an encrypted number placed in a large table somewhere. That is all. Its only "value" comes from the decision of another person to pay you money for something that is worth zero. It's the "bigger idiot" theory of value that is the hallmark of a bubble or fraudulent scheme.

I don't disagree with you at all, especially on the socially negative and environmentally destructive aspects of bitcoin.

But isn't *all* money just a socially-agreed-upon value? Gold doesn't have any more intrinsic worth than salt...in fact it has way less for human life, but cultures for the dawn of time have created the myth that it does have high intrinsic value. Ditto for cowrie shells, or cattle, or cat-eye marbles, or beads, or jade, or a huge number in a table somewhere.

It doesn't seem to me that bitcoin is in principle different than any other kind of currency. Cowrie shells and three dollars can get me a cup of coffee nowadays, but 300 years ago in this exact spot it could have gotten me some slaves.

Anyway, not trying to advocate for bitcoin at all, because IMO it's one of many things that are destabilizing things in the world today. Just some metaphysical speculations.

 

[rodoheel]

Buy Bitcoin if you want to make Peter Thiel and the Winklevoss twins rich while they laugh at you for being such a sucker and use the profits to destroy the world and rebuild it in their image.

 

[CLT Heel]

Wow, Super, tell me how you REALLY feel about bitcoin and cryptos in general. With that being said, I get your POV, and your post was quite informative. I guess I fall on tar spiels point about all of money and investments being somewhat subjective.

I don’t believe that btc is a Ponzi scheme like investment (well, not any more than any other investment in that the whole objective is to buy low and sell high). I do think that the future does depend on some sort of currency that is country-independent, and much like any other futuristic goal, it will take someone being the first to develop it to move it into existence. Is that BTC? I don’t know, maybe, maybe not.

In the meantime, yeah, I probably have gotten into BTC and Cryptos due to FOMO more than anything else. But like any good investor, I’m making sure that the money I put into it is money that I could absolutely afford to lose if push came to shove.

 

[gtyellowjacket]

Wow, Super, tell me how you REALLY feel about bitcoin and cryptos in general. With that being said, I get your POV, and your post was quite informative. I guess I fall on tar spiels point about all of money and investments being somewhat subjective.

I don’t believe that btc is a Ponzi scheme like investment (well, not any more than any other investment in that the whole objective is to buy low and sell high). I do think that the future does depend on some sort of currency that is country-independent, and much like any other futuristic goal, it will take someone being the first to develop it to move it into existence. Is that BTC? I don’t know, maybe, maybe not.

In the meantime, yeah, I probably have gotten into BTC and Cryptos due to FOMO more than anything else. But like any good investor, I’m making sure that the money I put into it is money that I could absolutely afford to lose if push came to shove.

I somewhat agree that a worldwide means of exchange would be beneficial, just to take some of the friction away from changingh currencies, but having a country not being able to control their own currency can be pretty dangerous.

One of the big issues that Greece ran into was they were on the Euro and weren't able to devalue their currency to make their exports more affordable and imports less competitive. Now the things that got Greece to that point were mostly self-inflicted but not being able to fix it without permission from other Euro states with very different priorities was a huge problem for them.

 

[ChapelHillSooner]

I don't disagree with you at all, especially on the socially negative and environmentally destructive aspects of bitcoin.

But isn't *all* money just a socially-agreed-upon value? Gold doesn't have any more intrinsic worth than salt...in fact it has way less for human life, but cultures for the dawn of time have created the myth that it does have high intrinsic value. Ditto for cowrie shells, or cattle, or cat-eye marbles, or beads, or jade, or a huge number in a table somewhere.

It doesn't seem to me that bitcoin is in principle different than any other kind of currency. Cowrie shells and three dollars can get me a cup of coffee nowadays, but 300 years ago in this exact spot it could have gotten me some slaves.

Anyway, not trying to advocate for bitcoin at all, because IMO it's one of many things that are destabilizing things in the world today. Just some metaphysical speculations.

Currencies have governments who make monetary policy to protect its value - or destroy it in some cases. Those same governments have militaries that can use force if necessary to protect the value of the currency.

 

[heelslegup]

The US dollar is the world's reserve currency: don't want to lose that status. See what happened in Britain after the pound sterling quit being the world's reserve currency

 

[farce©]

It seems to me the notion of BTC as a "currency" is a fallacy, at this point anyway. Can I buy a house with BTC? I guess it depends on the seller but you sure couldn't do so with a standard MLS contract. Can I buy a blender at Target with BTC? Not without changing it into dollars. So somebody will need to explain to me how it is a useful "currency" unless I'm operating in a black market.

I suppose it can be viewed as an investment, a commodity in the class of gold which also depends on the intrinsic faith of the investor in its value. But gold has shown to be valued for thousands of years, BTC (and I use BTC to mean all crypto variations) hasn't stood the test of time. I have actually considered buying a BTC ETF, but it would be strictly for FOMO. But I can't get past the "no underlying asset of value" and I don't invest in commodities. I guess I will have to stick with equities.

It strikes me as more like religion as it depends solely on faith.

 

[HeelInTheOzarks]

It seems to me the notion of BTC as a "currency" is a fallacy, at this point anyway. Can I buy a house with BTC? I guess it depends on the seller but you sure couldn't do so with a standard MLS contract. Can I buy a blender at Target with BTC? Not without changing it into dollars. So somebody will need to explain to me how it is a useful "currency" unless I'm operating in a black market.

I suppose it can be viewed as an investment, a commodity in the class of gold which also depends on the intrinsic faith of the investor in its value. But gold has shown to be valued for thousands of years, BTC (and I use BTC to mean all crypto variations) hasn't stood the test of time. I have actually considered buying a BTC ETF, but it would be strictly for FOMO. But I can't get past the "no underlying asset of value" and I don't invest in commodities. I guess I will have to stick with equities.

It strikes me as more like religion as it depends solely on faith.

It is not currency, it's stock. Just like I can't go to the car dealership and say I am buying this Toyota for my shares in Microsoft. What percentage of people who have Bitcoin are actually using it regularly for purchases? It has to be really really low. Everyone I know that's into it is treating it as an investment that they can flip for actual dollars at some point.

 

[farce©]

It is not currency, it's stock. Just like I can't go to the car dealership and say I am buying this Toyota for my shares in Microsoft. What percentage of people who have Bitcoin are actually using it regularly for purchases? It has to be really really low. Everyone I know that's into it is treating it as an investment that they can flip for actual dollars at some point.

But it’s called “cryptocurrency.” What’s that all about? If it is a stock, what is it shares of? What is the underlying asset you are buying?

It might be an “investment” but it’s not a stock.

 

[uncgriff]

Certainly the idea was that it would be a true currency when initially conceived and 'marketed' and at the time it held some theoretical possibility of being such. But venmo, tap to pay and apple/Google pay have thoroughly and effectively eaten that space. The only thing left is this vague naive idealism of money without borders. But has been stated the only practical value is scamming and criminal activities.

 

[mpaer]

I remember a story about George Watts Hill driving from Winston Salem to Derm with bags of cash Of course computers relaced the need for all that..
Now Today still Folks who own Weed companies fly across country with Bags of cash-because they can't use the Banks. And rich Gamblers fly to Veags-and back hopefully-with Bags of cash-cause its just freaking fun

 

[uncjhodges]

This was a really helpful article for me. I dabble in golf betting and DFS and am even on a discord. God these people suck. The underlying through line for everything is misogyny, toxic masculinity, and homophobia. Most (probably 50-60%)are not overtly political but obvious where their allegiances lay if they even vote, there’s another 30% that are avidly pro-trump and then a 10-20% that are probably liberal but just are there to actually bet. Just, like with all the Trump shit, it’s weird and stunted maturity, and makes me question my own sanity

 

[superrific]

I don't disagree with you at all, especially on the socially negative and environmentally destructive aspects of bitcoin.

But isn't *all* money just a socially-agreed-upon value? Gold doesn't have any more intrinsic worth than salt...in fact it has way less for human life, but cultures for the dawn of time have created the myth that it does have high intrinsic value. Ditto for cowrie shells, or cattle, or cat-eye marbles, or beads, or jade, or a huge number in a table somewhere.

It doesn't seem to me that bitcoin is in principle different than any other kind of currency. Cowrie shells and three dollars can get me a cup of coffee nowadays, but 300 years ago in this exact spot it could have gotten me some slaves.

Anyway, not trying to advocate for bitcoin at all, because IMO it's one of many things that are destabilizing things in the world today. Just some metaphysical speculations.

The nature of money is actually quite a capacious area of study on its own, combining economics, history, anthropology, sociology and other areas. I'm very much not an expert. I can't speak to cowrie shells in particular and how they were or weren't used. I can give you some thoughts based on what I know, in analyzing the statement "isn't all money just a socially agreed upon value." There will be an answer to your question in here. I apologize for burying it in the middle of a longish pontification, but it's the best way I know how to set up my analysis. Note that this partly reflects my own lack of full understanding. Ask me a question about corporate law and I don't usually need a few paragraphs to set it up (unless it's a complicated question that requires background in itself).

Actually, I'm going to split this into two posts. First post will be background and then I will get to the specific question.

1. Let's start with the easiest case -- pure fiat money, like the dollar and most currencies today. This is often considered the hardest case by people who don't think about things deeply, but it's actually super-straightforward. The government issues tokens, like bills or coins, and uses law to fix their value. End of story. This isn't "socially agreed upon value" (another common misperception) but the opposite: the law says that this coin is worth 1 dollar even if you can only get a few cents worth of stuff when it gets melted down. It doesn't matter if you want the stuff.

Governments have multiple ways of enforcing this value mandate, and they vary by intrusiveness. In today's world, especially in large economies, the government needs only the least intrusive means possible: it only accepts its currency for tax collection. Since everyone pays taxes, the currency has a floor of demand that gives it some value. And nothing else is needed. If you ultimately need to get dollars to pay taxes, and you can always exchange the currency on markets (including money markets), then why would you want anything else? What would be the motivation for using another currency? You'd only be introducing transaction costs for currency exchange. So use dollars. Done.

This is why crypto has almost zero penetration as a means of exchange. It's solving a problem that doesn't exist. The U.S. doesn't need a different type of currency. Dollars will do fine, thank you. And if we need foreign currency, well there are really liquid, really sophisticated currency markets. In theory, BTC could be some sort of universal currency-to-currency exchange, but why? The markets do just fine. BTC is costly. It's just pointless, unless . . .

2. Fiat money can fail, and its failure is called hyperinflation. Hyperinflation isn't defined by a particular rate (no, 10% inflation is not hyper, and 100% isn't necessarily hyper either). Hyperinflation is a loss of confidence that the currency can hold any value. So people typically spend currency as soon as they get it, which then increases the velocity of money, and that increases the overall money supply (money supply = monetary base * velocity), and that decreases the confidence even more, etc. Doom loop. To say that 50% inflation is hyper is to make an empirical claim that, if inflation reaches that point, this loss of confidence will occur -- or, in the alternative, 25% inflation usually occurs only with the loss of confidence.

In hyper-inflationary environments, people often improvise to find better tokens. Remember the stories from Weimar, in which people were picking up their wages with wheelbarrows? In these environments, sometimes alternate tokens can pop up, especially in self-sufficient communities. If you live in a small town, and mostly your trading partners live there as well, and the community survives by consuming its agricultural production, then it's not hard for some other token to become established. People basically come to use them sort of like implied contracts.

BTC got started because some techno folks decided they understood economics better than economists and began to fret that the U.S. dollar was doing to be experiencing hyper-inflation. It was 2011 or 2012 that BTC started to take off (slowly at first) -- back when there were rumblings by conservatives that the US was going to descend into hyperinflation because (checks notes) Obama authorized a $1T stimulus and the Fed lowered interest rates to basically zero. The US is going broke! We're printing money! We need a different token that will retain value if the dollar fails! It all turned out to be nothing but hype, and thus did this conception of BTC become more or less obsolete. You don't hear crypto folks talking about BTC as a hedge against hyperinflation any more. If they did, BTC would fall to zero because it would be unnecessary.

Obviously one central problem with the BTC as hyper-inflation hedge is that the risk of your BTC losing value through non-adoption is considerably higher than the risk of the dollar losing confidence. If only the techno bros had, you know, read some economics but alas.

 

[CRHeel94]

Just a random two cents...I know a fair amount of owners of sports books down here. I have found it curious that they've told me that 70% of their transactions have shifted from dollars to bitcoins. Why? Easier for bettors to hide their flows from Uncle Sam. Also the speed of access is much better than some dude showing up with a bag of cash for payouts.

Sportbooks guys actually hate having positions in bitcoin ("I already take risk on the gambling side") and try to liquidate as soon as they can. They're not there to speculate, just to make a transaction.

 

[superrific]

3. Now to the specific question: what about non-fiat money? What about "gold" as a currency? This is what I consider to be the trickiest problem and one that I don't entirely understand. I think that anthropologists probably have the best insights here, and I don't read a lot of anthropology (nor the economists who do, as they usually publish in specialized journals AFAIK). But anyway . . .

Here's a tl;dr that doesn't capture the whole analysis but does address the comparison between gold and salt. Salt isn't a good currency because its value comes from its consumption (assuming Mad Max is actually a fantasy). The only value to the non-fiat thing extinguishes it, which is sort of the opposite effect from what we would want. That is to say, anything really useful isn't a good candidate for non-fiat money. Anyway, back into the analysis.

A. Let's first start with the way that non-fiat currency would be implemented in today's world: currency tokens that are freely exchangeable for some reserve, like gold. There's a simple reason it has to be implemented this way: money should have no value in itself, because then people will raid the money. For instance, if we used gold coins for trade, people would shave off just a little bit of gold for their own stash before using the coin. This definitely occurs in prisoner camps (which are a source of knowledge about how money works in the absence of a controlling authority) where people use, say, cigarettes as currency. People would tap out a bit of tobacco for their own stash -- you know, to have your currency and smoke it too! -- until the cigarettes just become pathetic half-full rolls of paper.

In a fiat currency world, it doesn't matter whether the cigarettes get emptied out, as long as the thing remains recognizable as a currency. But we're assuming no fiat, meaning that the currency itself is supposed to have value (i.e. a way of using it that is valuable in case you can't find a buyer). The only way that can work is to have a paper currency that can be freely traded (usually by law) for a certain amount number of cigarettes or a certain amount of gold, etc. BTC does not have this problem because you can't shave off some BTC before selling it.

B. OK, so now we have our tokens. Now we just need a reserve product that can be freely traded for currency. And now we can get to the question originally asked: what reserve product should we choose? Well, it has to be scarce. If you use salt, then people can just get rich by boiling seawater and you get inflation. But obviously scarcity is not enough; it has to also be something that people want. If the government mandated that dollars can be freely converted into and from high-tech kazoos, we basically have a fiat currency because nobody would want to exchange their dollars. This is a basic failing of most theories of BTC value. Ultimately, these folks operate as if scarcity is not only a necessary property of money, but a sufficient one as well. It is not.

What else? Ideally, it would be compact, so you don't need a wheelbarrow to transport, but this isn't really that big of a problem so long as the reserve substance is divisible. That's not true of beads but is true of gold and salt. As long as it's divisible, then the exchange rate can adjust if physical transport is too onerous.

It should be useful, in a way that isn't consumptive. This was a tl;dr from above, and it makes obvious sense. To expand on the point, useful commodities cannot be money. The purpose of the money is to allow you to buy what you need. If salt is money and it becomes scarce, then people will start to hoard their salt and/or consume it. That will lead to further scarcity, and further hoarding, and the economy will be destroyed because people will prefer to eat their money than spend it.

C. So what is a thing that has value without being consumed? Gold. Why? Because, like the fake diamond in Donnie Brasco, you can give it to your wife. Seriously. Women want to be beautiful and like jewels that make them look beautiful. Men want their wives (who they more or less owned in ancient societies where gold was money) to look beautiful, as it confers social status. Where gold is not available, cowrie shells will have to do.

Social status is one of humans' most innate desires. And since economic power usually confers social status, people have an instinctive desire to find things that show it off. They get status without having to exercise their economic power. Gold's advantage over so many other metals is that it is so readily identifiable. It's shiny and yellow and unmistakably gold (at least in more primitive societies). If you make it into a crown, and wear the crown, you are projecting your economic status. Diamonds didn't have the same value; from a distance a diamond might look like quartz, and so a person needs to inspect the diamond before acknowledging its value. But the rich person doesn't want everyone inspecting his stuff to see that he's rich. He wants them to bow to him on sight. Thus, gold.

Hmm. I wonder if, in writing this, I've solved the problem in my own head a little bit.

This explains the emergence of NFTs, right? Bitcoin is unobservable. You can't put BTC on your twitter profile. You can't use BTC to show off your economic power. But, online, you can use NFTs, in theory. That's why the IP issue in NFTs was always so important (and because of the difficulties, expensive NFTs have not to my knowledge been anything other than a fad). If anyone can put the penguin you just bought on their twitter profile, then you've lost the ability to project your status. The penguin itself no longer demonstrates wealth.

****
Anyway, this was quite a disquisition and I have to emphasize: I'm not speaking with tremendous authority here, and I'm not going to try to tease out which sub-issue is backed by expertise and which isn't. I'm confident that the coin-shaving or cigarette tapping examples did happen, and they helped account for the rise of the value-backed token as a substitute for direct trading of the valuable item. Most of the rest is a blend of knowledge, my own musings and logic.

 

[superrific]

Just a random two cents...I know a fair amount of owners of sports books down here. I have found it curious that they've told me that 70% of their transactions have shifted from dollars to bitcoins. Why? Easier for bettors to hide their flows from Uncle Sam. Also the speed of access is much better than some dude showing up with a bag of cash for payouts.

Sportbooks guys actually hate having positions in bitcoin ("I already take risk on the gambling side") and try to liquidate as soon as they can. They're not there to speculate, just to make a transaction.

The only good or service produced and consumed in a bitcoin economy is corruption -- in this case, tax evasion. And the sportsbook guys demonstrate why. Nobody uses bitcoin for anything non-corrupt because there's no floor for demand. You can't pay your workers in bitcoin because they don't want it (they want something they can spend and pay taxes with); you can't pay your suppliers with it; and you can't pay your taxes with it. So you unload it and bitcoin becomes basically an expensive and environment-destroying credit card.