Post
Topic
Board Economics
Re: Proposal: a DeCentral bank
by
hugolp
on 06/07/2011, 05:00:42 UTC
A horrible idea. Money transfered between accounts does not mean that people is spending money. Miners that want more money created would just transfer money between their accounts so more money is created and they can get some. And there is no way to change this without radically changing Bitcoin and loosing some of its basic characteristics.

And then its also a bad idea for the economics behid it.

Also more people will start to speculate in the bitcoin, with a more regulated economy this would be a good thing. This would mean that people would buy if they think the price is too low and sell when they think it is too high, thus softening otherwise steep jumps or plunges and create a more stable merchant friendly bitcoin. But speculators can also have a very bad effect on not regulated small markets as I will describe later.

A regulated market means a market rigged in favour of the bit players (see Goldman Sachs, JP Morgan, etc...). I much rather deal with stupid kids trying to play the free market (and most of them loosing at it) than knowing that the system is completely rigged in favour of a few by regulations.

Just remember how a Chicago trader approached the SEC several times warning the regulators about Madoff. The SEC did 3 investigations on Madoff and decided not to act. Madoff was very well connected. And this is not an exception, its the norm. For example, recently a judge retiring from the CFTC, the commodity regulators, admitted that they had been covering market manipulations. His own words:

"There are two administrative law judges at the Commodity Futures Trading Commission: myself and the Honorable Bruce Levine. On Judge Levine's first week on the job, nearly twenty years ago, he came into my office and stated that he had promised Wendy Gramm, then Chairwoman of the Commission, that we would never rule in a complainant's favor. A review of his rulings will confirm that he has fulfilled his vow. Judge Levine, in the cynical guise of enforcing the rules, forces pro se complaints to run a hostile procedural gauntlet until they lose hope, and either withdraw their complaint or settle for a pittance, regardless of the merits of the case"

See how regulations and regulators work? They only serve the big players. Its not something you want in Bitcoin, unless you are a cheater and want to make use of them.