Thread: Bitcoin
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Old 05-06-2016, 09:34 AM   #19
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Join Date: Jan 2001
Posts: 11,277
Originally Posted by Undertoad View Post
It's 100% emotional. Logic and reason do not apply to the future.
Taxes do not define integrity of a currency. Dollar is controlled / defined by a Federal Reserve. World's most stable currencies all have equivalent to a Federal Reserve.

None of what backs a dollar is emotional. Dollar is stable due to facts - what the economy does, actions by the Central Bank, well defined numbers, AND due to previous and statistical history that so many all over the world have experienced and learned from. Emotion only exists if one trusts the dollar only because someone is told (like a child) to trust a dollar.

Some foolishly (emotionally) assume a currency must be backed by gold. We know from history and underlying economic facts that currencies (and therefore economies) work best when the currency is not backed by some irrelevant reference such as gold. Otherwise gold coins minted by the Islamic state would have great demand and trust. In reality, the Islamic gold dinar is a poor transaction media due to an economy that defines it and people that created it.

In 1931, Britain disconnected gold from their pound. Integrity of that currency increased. Even an economic boom resulted. No emotions were involved. It works due to hard and well proven facts.

Integrity of a currency is defined by its Central Bank and by the economy that underpins it. Those facts are even measured quantitatively. Those facts define what happens in currency exchanges all over the world.

However many do not understand those facts. Many trust a dollar only because others have told them to do so. They are emotional. They have little understanding of what underpins a currency. Some have so little grasp of those facts as to even believe gold must underpin a currency - because their emotions tell them to believe that myth.

Integrity of international currencies are based in (and can be destroyed by) fundamental facts. Emotion exists among the naive AFTER fundamental concepts break down. Trust in currencies exists due to fundamental and logical facts - such as stability of an economy that underpins that currency and actions of a Central Bank that defines / maintains that currency. No emotion exists in facts, actions and numbers. Emotion only exists among those who fail to comprehend those facts, actions, and numbers.

Bitcoin has an underlying flaw. Its integrity is backed by a vague group that answers to no one. In its short life, it has worked quite well. But statistical proof necessary to establish it integrity, a 'Central Bank' concept that defines it, its ability to expand with economic growth, and what keeps its management honest does not yet exist. Trust is defined by facts; not emotion.

Last edited by tw; 05-06-2016 at 09:43 AM.
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