I still cannot understand how crypto advocates genuinely think governments will roll over and let cryptocurrencies take away one of the primary powers of the state: minting and control of the flow, supply, and thus value of the currency. Ironically, to me, crypto seems to already assume the utopia it aims to usher in (namely, the one in which decentralized currencies are legal and valid).
Also the idea that we can bully or criticize governments into adopting crypto by calling the ones who don’t “tyrannical” is especially naive and hilarious to me. By virtue, the truly tyrannical do not care about being called such.
> let cryptocurrencies take away one of the primary powers of the state: minting and control of the flow, supply, and thus value of the currency
I think crypto proponents have exaggerated the threat that cryptocurrency poses to government controlled currencies. The narrative plays well to audiences that distrust institutions and want to be early adopters of a new cryptocurrency paradigm (in which they would be at the top of the wealth spectrum), but the reality is that cryptocurrencies are additive on top of existing currencies, not replacements.
In practice, average people in average countries (e.g. not Venezuela) benefit more from having centrally controlled currencies than they lose. Average people also benefit from having an established currency rather than being forced to switch to one that is majority controlled by a few early adopters. If you think wealth inequality is bad now, the wealth inequality in a hypothetical Bitcoin economy would be orders of magnitude worse.
The idea that one day Bitcoin will reign supreme and everyone will be forced to buy 0.0000001 Bitcoin to get any transactions done is attractive to someone who wants Bitcoin prices to go the moon, but the average person wants nothing of the sort.
> I still cannot understand how crypto advocates genuinely think governments will roll over and let cryptocurrencies take away one of the primary powers of the state
They'll not rollover. But it'll happen in two ways: 1. They don't understand it (never underestimate the stupidity of politicians and regulators) and thus they'll either allow it or not know how to stop it; or 2. Crypto is widespread and the government has little control over on-off ramps. It doesn't help that crypto-currencies wreak havoc on their economy stability (which further makes them unable to control the population).
One thing that this article only briefly skims over (Turkish lira’s dropping and issues in management at their central bank) are in their own way burying the lede.
Historically (re: recent history of Venezuela, Argentina, Zimbabwe ) crypto assets’ “clunkiness” and functional downside aside- get rapidly adopted when the centrally managed currency loses confidence of the people. This further threatens this “central bank managed currency” via accelerated wealth outflows, in this case of the Lira - and all other reasons mentioned smell like cover to me.
This ban is but a reaction and protective measure to slow down wealth transfer out of the governments reach of regular Turkish citizens. A closer look at the state of the Turkish central bank and drivers of monetary policy would likely also reduce your confidence that they know what they are doing and this is a broadly anti crypto move. As a result, this ban has nothing to do with thought through policy. It’s meant to limit outflows from the Lira as the Turkish economy sadly spins out of control.
It's considered property in the US. And the rights to own are protected by the constitution.
As long as western governments don't go on a crusade, cryptocurrencies will continue to thrive.
Bitcoins’ biggest strength is also its weakness: anonymity.
It only takes a few bad actors to do something nefarious for the US to ban it. After the ban Bitcoin might still continue to exist but it won’t be institutionalized and so it will loose it’s appeal.
Also, for people who think the US does not have the power to ban it, see this:
Exactly. What many people who tout the idealogical benefits of crypto don't understand is that it's not a technology problem, it's a political problem that can't be solved by technology.
This with Turkey is a good example. If it's illegal for a business to accept crypto, there's nothing crypto can do about that. Turkish businesses need to comply or face fines and shut downs. What do you think will happen most likely?
So long as flagrant copyright violation also continues to exist online, bans pose minimal threat to cryptocurrency diffusion. This time is not different.
Your logic seemingly reduces to "Governments are too tyrannical to allow revolution against their tyrannical practices, therefore it's ridiculous to try."
ok I’ll take your bait and it’s an easy answer the smart ones don’t. We aren’t even in the first battle of the coming war to wrestle currency back into private hands. My question for you would be why do you think governments even stand a chance? Try shutting down the internet, US SEC chairwoman admits will be very hard to stop without extreme technical measures. Please tell how are they going to stop cryptocurrency? With silly bans like Turkey’s? What a joke.
They will not roll over, but they will lose anyway. Fighting technological change is like pissing straight into the wind. We've seen it happen multiple times already, even in our lifetime.
Bitcoin is inherently censorship-resistant and unaffected by borders, so banning in any given country will have minimal effect on its usefulness as a savings mechanism unless it’s banned ~everywhere and regulatory arbitrage becomes too inefficient.
First-world governments that are relatively constrained in what they are allowed to do to their citizens may be unable to ban Bitcoin even if they wanted to.
this is one of the best use cases for crypto -- as a popular disciplining measure against governments that devalue their currency. see venezuela, nigeria, argentina... my sympathies are solely with the ordinary people who would otherwise watch their savings evaporate.
I wonder if some bitcoin whales are fronts for oil companies that are buying up bitcoin as a way of increasing demand for electricity and thus maintain demand for fossil fuel power generation. Renewable energy is getting cheaper over time, which would tend to drive out fossil fuel electrical generation, so if demand is dramatically increased due to crypto currency mining then demand for fossil fuel plants to stay operating will be maintained.
My first reaction to this was "most crypto mining is done on hydro power because it's cheaper," but then I remembered that demand for power is currently outpacing the growing supply of renewable energy, so many this theory isn't all that crazy.
In any case, given that I have yet to see a single non-criminal, non-speculation use for crypto at any real scale, I find ideas that would normally sound a lot like conspiracy theories much more plausible.
I love the concept of Bitcoin but I can't help but notice that its effects on the world seem to be more negative than positive. Wasting power, supporting immoral enterprises, malware mining attacks, and the decimation of the GPU market. Like yay eff the government but I want to be able to buy a damn graphics card.
> The Turkish central bank banned the use of cryptocurrencies as a form of payment from April 30, saying the level of anonymity behind the digital tokens brings the risk of “non-recoverable” losses.
> A lack of regulation, supervision mechanisms or central regulatory authority, combined with the potential for criminal activity and the high volatility of their market value, mean digital tokens entail “significant risks,” the central bank said in a statement on its website.
How is this different from any other raw material that one can use to purchase goods?
If a store allow it, one can buy goods in gold, silver, chairs, or Magic: The Gathering cards, which come with all the same problems.
How do they plan on enforcing this? Unless their enforcement strategy is “force international companies to do cryptocurrency business in other countries.”
> [the regulations] prohibit companies that handle payments and electronic fund transfers from processing transactions involving cryptocurrency platforms [...]
> [the chief executive] officer of BtcTurk, one of Turkey’s largest cryptocurrency platforms in terms of number of clients [said] “This mainly targets electronic payment systems.”
Capability does not confer legality. Why would crypto force a government’s hand? They’re the ones with the laws and the monopoly on force.
Consider what would happen if you sent fiat to a group recognized as a supporter of terrorism. You can do so, but it is not legal.
What remains to be seen is if Turkey is an outlier, or the start. Monetary and currency policy is power, and crypto's value store is fragile, teetering on the whims of nation states.
Seems like a bad idea unless they offer some other peer to peer alternative for digital payments. This is clearly something that people want. I can imagine they will be reversing this decision at some point.
They aren't doing it for 'the people' obviously. Once you gravitate towards an autocracy it matters a whole lot less why you do things, or who it is supposed to be for.
On the other hand, banning things in the digital realm is rather difficult. Unless you go completely offline in practical terms, there is no real way to stop this type of communication.
You would imagine this is what people want. I'd generally think people want to leave in free, secular, uncorrupt societies. Turns out that's not always the case.
The fundamental problem is that Erdogan has no clue about economics. He is envious of US and EU countries because they have both low interest rates and low inflation. Interest rates can be controlled directly by politicians, so he thinks that by controlling one variable the other one will follow. He got it exactly backwards, interest rates are primarily determined by the market and the central bank is trying to follow the market rate, which theoretically is unknowable but usually inflation + some is good enough. This is why central bank independence is considered the primary predictor of low inflation, because the central bank can actually do its job.
You have to look at the total investment rate and the total savings rate. Over the long term they should not drift apart and for low inflation you want the savings rate to exceed the investment rate. When people decide to cut back on consumption .i.e. they want to save, they will save regardless of what savings vehicle they end up choosing. The real interest rate (interest rate minus inflation) is way too low for the Lira. A bank account with Lira deposits is simply an extremely bad savings vehicle. People just stop saving, or they put their savings elsewhere, mostly USD, EUR and sometimes Bitcoin. Banning foreign or cryptocurrencies doesn't really do anything, it's akin to pointing a gun at someone and saying they should put their money into a bank account anyway.
Ok, lets assume a perfect savings vehicle called SV exists (0% yield and 0% volatility). We can benchmark the yield of currencies against this savings vehicle. For the sake of the argument assume that Lira has 10% inflation and 0% interest then it will have -10% yield. Picking SV will grant you 0% yield, which is 10% more than the Lira.
If you raise the interest rate to 10% then the Lira will have 0% yield. It will be equivalent to SV but SV is considered more trustworthy. SV has effectively set a lower bound for interest rates. Any lower and people will just run away from the Lira. Therefore the interest rate must be higher than inflation and this premium depends on how confident "savers" are. You are basically pricing in the default rate.
Let's apply this to a different market. The US (corporate) savings rate is so high that negative interest rates are necessary, the problem is that treasury bonds put an effective 0% interest lower bound. Interest simply cannot shrink lower than that because lower interest rates will simply lead to purchases of treasury bonds. The answer in this case is to raise inflation instead because it acts as negative yield on excess savings. The easiest way is to simply print money and hand it out to those who plan to spend it, the increased spending will drive unemployment down. Another solution is to just increase the investment rate so that excess savings are being soaked up and interest rates will rise naturally.
[+] [-] merricksb|4 years ago|reply
https://news.ycombinator.com/item?id=26831162
[+] [-] uncomputation|4 years ago|reply
Also the idea that we can bully or criticize governments into adopting crypto by calling the ones who don’t “tyrannical” is especially naive and hilarious to me. By virtue, the truly tyrannical do not care about being called such.
[+] [-] PragmaticPulp|4 years ago|reply
I think crypto proponents have exaggerated the threat that cryptocurrency poses to government controlled currencies. The narrative plays well to audiences that distrust institutions and want to be early adopters of a new cryptocurrency paradigm (in which they would be at the top of the wealth spectrum), but the reality is that cryptocurrencies are additive on top of existing currencies, not replacements.
In practice, average people in average countries (e.g. not Venezuela) benefit more from having centrally controlled currencies than they lose. Average people also benefit from having an established currency rather than being forced to switch to one that is majority controlled by a few early adopters. If you think wealth inequality is bad now, the wealth inequality in a hypothetical Bitcoin economy would be orders of magnitude worse.
The idea that one day Bitcoin will reign supreme and everyone will be forced to buy 0.0000001 Bitcoin to get any transactions done is attractive to someone who wants Bitcoin prices to go the moon, but the average person wants nothing of the sort.
[+] [-] csomar|4 years ago|reply
They'll not rollover. But it'll happen in two ways: 1. They don't understand it (never underestimate the stupidity of politicians and regulators) and thus they'll either allow it or not know how to stop it; or 2. Crypto is widespread and the government has little control over on-off ramps. It doesn't help that crypto-currencies wreak havoc on their economy stability (which further makes them unable to control the population).
[+] [-] clomond|4 years ago|reply
Historically (re: recent history of Venezuela, Argentina, Zimbabwe ) crypto assets’ “clunkiness” and functional downside aside- get rapidly adopted when the centrally managed currency loses confidence of the people. This further threatens this “central bank managed currency” via accelerated wealth outflows, in this case of the Lira - and all other reasons mentioned smell like cover to me.
This ban is but a reaction and protective measure to slow down wealth transfer out of the governments reach of regular Turkish citizens. A closer look at the state of the Turkish central bank and drivers of monetary policy would likely also reduce your confidence that they know what they are doing and this is a broadly anti crypto move. As a result, this ban has nothing to do with thought through policy. It’s meant to limit outflows from the Lira as the Turkish economy sadly spins out of control.
[+] [-] rafale|4 years ago|reply
[+] [-] victor106|4 years ago|reply
It only takes a few bad actors to do something nefarious for the US to ban it. After the ban Bitcoin might still continue to exist but it won’t be institutionalized and so it will loose it’s appeal.
Also, for people who think the US does not have the power to ban it, see this:
https://en.m.wikipedia.org/wiki/Gold_Reserve_Act#Litigation_...
[+] [-] shafyy|4 years ago|reply
This with Turkey is a good example. If it's illegal for a business to accept crypto, there's nothing crypto can do about that. Turkish businesses need to comply or face fines and shut downs. What do you think will happen most likely?
[+] [-] megameter|4 years ago|reply
[+] [-] TheBlight|4 years ago|reply
[+] [-] dsyrk|4 years ago|reply
[+] [-] nathias|4 years ago|reply
[+] [-] jb775|4 years ago|reply
[deleted]
[+] [-] lucasyvas|4 years ago|reply
[+] [-] wyager|4 years ago|reply
First-world governments that are relatively constrained in what they are allowed to do to their citizens may be unable to ban Bitcoin even if they wanted to.
[+] [-] _trampeltier|4 years ago|reply
[+] [-] nyolfen|4 years ago|reply
[+] [-] unknown|4 years ago|reply
[deleted]
[+] [-] okareaman|4 years ago|reply
[+] [-] cowpig|4 years ago|reply
In any case, given that I have yet to see a single non-criminal, non-speculation use for crypto at any real scale, I find ideas that would normally sound a lot like conspiracy theories much more plausible.
[+] [-] wishysgb|4 years ago|reply
[+] [-] csomar|4 years ago|reply
[+] [-] imtringued|4 years ago|reply
[+] [-] Causality1|4 years ago|reply
[+] [-] xwolfi|4 years ago|reply
[+] [-] Blikkentrekker|4 years ago|reply
> A lack of regulation, supervision mechanisms or central regulatory authority, combined with the potential for criminal activity and the high volatility of their market value, mean digital tokens entail “significant risks,” the central bank said in a statement on its website.
How is this different from any other raw material that one can use to purchase goods?
If a store allow it, one can buy goods in gold, silver, chairs, or Magic: The Gathering cards, which come with all the same problems.
[+] [-] clankyclanker|4 years ago|reply
[+] [-] riffraff|4 years ago|reply
> [the chief executive] officer of BtcTurk, one of Turkey’s largest cryptocurrency platforms in terms of number of clients [said] “This mainly targets electronic payment systems.”
[+] [-] iampims|4 years ago|reply
[+] [-] toomuchtodo|4 years ago|reply
Consider what would happen if you sent fiat to a group recognized as a supporter of terrorism. You can do so, but it is not legal.
What remains to be seen is if Turkey is an outlier, or the start. Monetary and currency policy is power, and crypto's value store is fragile, teetering on the whims of nation states.
[+] [-] bitcoinmonger|4 years ago|reply
[+] [-] liquidify|4 years ago|reply
[+] [-] oneplane|4 years ago|reply
On the other hand, banning things in the digital realm is rather difficult. Unless you go completely offline in practical terms, there is no real way to stop this type of communication.
[+] [-] joelbluminator|4 years ago|reply
[+] [-] LegitShady|4 years ago|reply
Unregulated crypto is a giant bubble that damages countries abilities to regulate their own economy.
Crypto isn't required for peer to peer electronic payments. That's not an argument for crypto it's an argument for e-transfer.
[+] [-] codingslave|4 years ago|reply
[+] [-] GrumpyNl|4 years ago|reply
[+] [-] imtringued|4 years ago|reply
You have to look at the total investment rate and the total savings rate. Over the long term they should not drift apart and for low inflation you want the savings rate to exceed the investment rate. When people decide to cut back on consumption .i.e. they want to save, they will save regardless of what savings vehicle they end up choosing. The real interest rate (interest rate minus inflation) is way too low for the Lira. A bank account with Lira deposits is simply an extremely bad savings vehicle. People just stop saving, or they put their savings elsewhere, mostly USD, EUR and sometimes Bitcoin. Banning foreign or cryptocurrencies doesn't really do anything, it's akin to pointing a gun at someone and saying they should put their money into a bank account anyway.
Ok, lets assume a perfect savings vehicle called SV exists (0% yield and 0% volatility). We can benchmark the yield of currencies against this savings vehicle. For the sake of the argument assume that Lira has 10% inflation and 0% interest then it will have -10% yield. Picking SV will grant you 0% yield, which is 10% more than the Lira.
If you raise the interest rate to 10% then the Lira will have 0% yield. It will be equivalent to SV but SV is considered more trustworthy. SV has effectively set a lower bound for interest rates. Any lower and people will just run away from the Lira. Therefore the interest rate must be higher than inflation and this premium depends on how confident "savers" are. You are basically pricing in the default rate.
Let's apply this to a different market. The US (corporate) savings rate is so high that negative interest rates are necessary, the problem is that treasury bonds put an effective 0% interest lower bound. Interest simply cannot shrink lower than that because lower interest rates will simply lead to purchases of treasury bonds. The answer in this case is to raise inflation instead because it acts as negative yield on excess savings. The easiest way is to simply print money and hand it out to those who plan to spend it, the increased spending will drive unemployment down. Another solution is to just increase the investment rate so that excess savings are being soaked up and interest rates will rise naturally.
[+] [-] boromi|4 years ago|reply