The Libra

[32BT]

Personally, I'm all for an independent truly democratised global currency. I can see the downsides, but also the benefits. I can see how governments will lose control (if they even had it, since most replicate the independent banking model), but at the same time, it would trigger solutions to a lot of the problems currently experienced by most western societies.

For example, an independent currency requires a government to find new ways of "financing" governmental services. This of course will likely trigger a better service model. Politics might become more streamlined because of this. Banks no longer get a blank check to create and move virtual money at will, wrecking the economy in the process. They finally need to operate like most other businesses.

There is of course a very important aspect to it: what determines the value of a digital currency? Is it the artificial scarcity of computational limits? That's a dangerous proposition to be honest. If the introduction of quantum computing or some other new computingparadigm instantly changes the scarcity limits overnight?

What if we could attach that currency to productivity resources (e.g. dollar - oil)? That's a coupling that always made perfect sense to me. Clearly, the value of money then is in the potential productivity you manage with those resources. This is entirely different from say backing your money with precious gems like diamonds, which doesn't seem as relevant in terms of both productivity and survival.

What then if we finally manage to introduce a workable solution regarding renewable energy? Would a coupling still make sense then?

But most of all: is it reasonable (or even safe) to let a facebook provide such a currency?

These tech giants suck up all technology resources (including programmers and other techies etc.). If they then introduce a tech currency - which is what it basically is, and not an oil currency for example - what does that mean to the global society. How does this translate to services offered to the needy and tech illiterates?

I'm fine with bitcoin, as a standard and maybe as a technology. I'm fine with people offering services around the bitcoin, or the ledger. This is innovation. Techgiants offering bitcoin wallets? Fine, but techgiants introducing a whole new currency?

What do you people think?

[Rob C]

We shood stick with the pound, the English pound. The Scots also use it, and they say that they can still use it if/when they become independent of the mess going down down there. The Welsh; the Northern Irish? Who can tell? Those lands of mists and myths always manage to survive, even during internecine killing periods.

I would not want any currency based on electronic values. If the lights go out, your little tin under the bed will still rattle with pennies when your computer and ATM are dead.

As somebody's grandfather used to say: a groat is always a groat, my lad!

Rob

[32BT]

As somebody's grandfather used to say: a groat is always a groat, my lad!

Yeah, well, you ever tried to chew on one?   


;-)

[Rob C]

Yeah, well, you ever tried to chew on one?   


;-)

The scientists are working on it; a non-genetically modified version, of course.

:-)


P.S.

Looking around the restaurant just now, I assumed in my reply that you referred to eating the groat, not the grandfather?

[32BT]

Looking around the restaurant just now, I assumed in my reply that you referred to eating the groat, not the grandfather?

I hope for your sake I was, considering the many hungry individuals near you and your parental status.

You could always defend yourself with your camera. Show it to them and say: I'm a photographer with bad taste! I'm sure they will believe you instantly.

[Rob C]

I hope for your sake I was, considering the many hungry individuals near you and your parental status.

You could always defend yourself with your camera. Show it to them and say: I'm a photographer with bad taste! I'm sure they will believe you instantly.

The taste thing sounds like a good idea - unless they happen to have been Helmut Newton fans and agree with his interpretation of taste!

Why is life so full of dangerous choices and so few easy, good ones?

[32BT]

I know some types of flies that look like wasps. Humanoids presume that presented a modest evolutionary advantage because the birds might mistake the two. Obviously, most flying crap of that size is either pitch black or eaten by bats who don't give a flying fig, as long as it sounds good. So maybe there's your answer: if it sounds good, eat it...!?

[Alan Goldhammer]

The big problem with cryptocurrency is the huge volatility swings.  I don't think this is tolerable.  It would also have to be either integrated into the current banking/payment system or a separate system developed.  Perhaps it will lead to the a totally cashless future and everything will be done via smartphone transfers (be sure to carry a spare battery pack with you).  I'm not prepared at this point in time to put my trust in Crypto as there have been too many reports of people losing funds that they thought were safely stored in their personal 'vault.'  Ultimately, there would have to be migration to a single Crypto as multiple currencies will lead to exchange headaches.

[32BT]

The big problem with cryptocurrency is the huge volatility swings.  I don't think this is tolerable.  It would also have to be either integrated into the current banking/payment system or a separate system developed.  Perhaps it will lead to the a totally cashless future and everything will be done via smartphone transfers (be sure to carry a spare battery pack with you).  I'm not prepared at this point in time to put my trust in Crypto as there have been too many reports of people losing funds that they thought were safely stored in their personal 'vault.'  Ultimately, there would have to be migration to a single Crypto as multiple currencies will lead to exchange headaches.

The volatility swings may be a result from a combination of early adoption and speculation. Clearly, if adoption is eventually wider spread, more stable backing results. Most likely the majority of the currency resides with a few relatively extremely big players atm. Clearly, if a facebook adopts bitcoin as a standard it would potentially spread the value of the currency much better.

Question is of course whether they are a better source for controlling or instigating an entirely new crypto currency?

Losing funds to hacking (or usermistakes) is also (going to be) a far bigger problem with crypto than irl pickpocketing etc...

[Rob C]

I know some types of flies that look like wasps. Humanoids presume that presented a modest evolutionary advantage because the birds might mistake the two. Obviously, most flying crap of that size is either pitch black or eaten by bats who don't give a flying fig, as long as it sounds good. So maybe there's your answer: if it sounds good, eat it...!?

That explains it: Brexiteers are rabid bats!

It's taken dozens of columns of circular argument - columns eventually do become circular when, end-to-end, they circumnavigate the Earth - and here you are: in a brief exchange you have explained it all! All that angst, all those incessantly repeated questions and answers accomplishing nothing, all those megawatts of power drained out of natural, finite resources... have you thought of standing for the next leadership of the UN election?

;-)

[Alan Klein]

The big problem with cryptocurrency is the huge volatility swings.  I don't think this is tolerable.  It would also have to be either integrated into the current banking/payment system or a separate system developed.  Perhaps it will lead to the a totally cashless future and everything will be done via smartphone transfers (be sure to carry a spare battery pack with you).  I'm not prepared at this point in time to put my trust in Crypto as there have been too many reports of people losing funds that they thought were safely stored in their personal 'vault.'  Ultimately, there would have to be migration to a single Crypto as multiple currencies will lead to exchange headaches.

There's nothing backing them up like when we had gold and silver certificates.  It's basically fiat currency.  It has value because someone says it has value.  So did the tulips. 

[32BT]

There's nothing backing them up like when we had gold and silver certificates.  It's basically fiat currency.  It has value because someone says it has value.  So did the tulips.

And so does most of our western currency. With only ~6% assets backing it up, most of it represents future productivity. A feeble basis considering the speed at which we're depleting oil.

[Rob C]

And so does most of our western currency. With only ~6% assets backing it up, most of it represents future productivity. A feeble basis considering the speed at which we're depleting oil.

I recall from my period in India that the local village ladies wore what little wealth any had around their ankles in thick bangles of silver.

I am working on a new currency called the Rrob; I'm planning to base its value on photographs of windows and dummies. The more dummies the higher the value. If the pix include a selfie, you get double value. Simple. What could go wrong?

(The Libra sets a dangerous precedent: the pound sterling is just that: la libra sterlina.)

[kers]

One of the problems of the Euro is that nations cannot use value of the currency as a 'tool' when they think their economy needs a lower or a higher value.
Great Brittain kept its pound and the value at the moment decreases compared to the Euro. Italy cannot do the same how much they would like to ( at the moment)

[Alan Klein]

And so does most of our western currency. With only ~6% assets backing it up, most of it represents future productivity. A feeble basis considering the speed at which we're depleting oil.

Nothing backs up the dollar, not even oil.  It's a promissory note.  But there's nothing behind it.  You can't cash it in for silver, gold or oil.  Rob had it right.  The Indians wearing gold bangles on their ankles are smarter than people holding the Libra, cryptocurrency, US dollar and EU or any other fiat currency.  This year, the US will spend $1 trillion beyond it's taxes.  It had to print most of that through inflation.  What do you think that will do to the value of the dollar and my savings? 

[Alan Goldhammer]

.  This year, the US will spend $1 trillion beyond it's taxes. It had to print most of that through inflation.  What do you think that will do to the value of the dollar and my savings? 

I read a lot of financial stuff and have not seen anyone state that there is inflation these days.  The Federal Reserve is trying very hard to achieve 2% inflation and it's not happening.  The big problem with low interest rates is they penalize those who are in conservative investments such as CDs and bonds.  Older Americans are forced into more speculative equities so that they can maintain cash for their retirement years.

[faberryman]

What do you think that will do to the value of the dollar and my savings?

Are you hiding your money in a mattress? A decent money market account beats current inflation.

[32BT]

Nothing backs up the dollar, not even oil.  It's a promissory note.  But there's nothing behind it.  You can't cash it in for silver, gold or oil.  Rob had it right.  The Indians wearing gold bangles on their ankles are smarter than people holding the Libra, cryptocurrency, US dollar and EU or any other fiat currency.  This year, the US will spend $1 trillion beyond it's taxes.  It had to print most of that through inflation.  What do you think that will do to the value of the dollar and my savings? 

The main resource for our productivity is purchased in dollar. That automatically makes it safer than silver or gold. If push comes to shove no one will be able to warm their caves and shelter with silver and gold. But they have to have dollars to purchase oil. If everybody wants dollars, they really want that promissory note of yours. Not because the US financial system promises anything, but because the Saudis promise you something in return for those notes.

Of course, they already have a shyteload of those notes, to the point that the notes don't represent any value to them anymore, but to the lowly rest of us it becomes a valuable note. Obviously, the silver and gold and warming of caves is just a figure of speech to represent productivity and the requirement of resources in order to actually be productive.

Now, as long as the Saudis are happy with those notes, you can print them all day any day, because the rest of the world really, really needs the notes for their oil addiction. Even your worst enemies. That is of course, until oil runs out and/or those notes no longer represent mineable oil reserves.

[amolitor]

Money is many things. My experience is that if someone wants to tell you what money actually is they probably have no idea what they're talking about.

[Rob C]

Money is many things. My experience is that if someone wants to tell you what money actually is they probably have no idea what they're talking about.

Thank you for stating that. I feel a lot better now, having often wondered how this token of relative values actually functions.

The thing I do know for sure is this: the exchange rate, pounds to euros, which is how my pension goes down, is never as high as the value of the day shows it to be. Ditto whenever I transfer pounds to boost my Spanish account. I always feel I'm getting screwed over. Morality, fairness, even break, level playing fields, what fantasies we invent for our enjoyment!