Forum Thread

Is This The Beginning of The End For Bitcoin?

Reply to ThreadDisplaying 6 Posts
  • Strongly Liberal Democrat
    Democrat
    Portland, OR
    Are you sure you want to delete this post?
        
    In theory, it almost sounds too good to be true: A virtual currency that isn't beholden to the whims of federal and global regulatory authorities. One that uses a complex formula to control its management and distribution. And one that is the dream of libertarians and conservatives for its lack of government oversight. That is until floor drops beneath its feet.

    The Senate Banking Committee had Federal Reserve Chairperson Janet Yellen in for her semi-annual testimony yesterday and it shouldn't be a surprise that the topic of Bitcoin's recent troubles came up. Ms. Yellen was asked what the Federal Reserve was doing to regulate the troubled currency and Senator Manchin even called on the Fed to ban the currency entirely. Ms. Yellen had to give the Senator's a lesson in the Fed's oversight abilities:

    Bitcoin is a payment innovation that’s taking place outside the banking industry. To the best of my knowledge there’s no intersection at all, in any way, between Bitcoin and banks that the Federal Reserve has the ability to supervise and regulate. So the Fed doesn’t have authority to supervise or regulate Bitcoin in anyway.

    The fact that a Senator on the Banking Committee didn't understand this is a topic for another discussion, but what Bitcoin's current troubles show us is that there is a reason we have Federal oversight of our monetary system. The idea of having a lawless monetary system based on trust has been tried time and again before. The results are always the same.

    The five year period between the First and Second Bank of the United States was one of hyperinflation and countless state and individual bank currencies. The period after the Second Bank's charter ceased and the Federal Reserve came about was one of constant rises and crashes, with three major crashes in 1873, 1893, 1907. So it is of no surprise that the Federal Government finally got around to creating a Federal system that monitored and regulated a single national currency. While it is not perfect, as 1929 and 2008 have shown us, it is far better than the constant rises and falls of the 1800 and early 1900's.

    Bitcoin is no different. There is very little chance of a world currency prospering when there is no legal entity monitoring it. How will investors feel confident investing in something that can crash on the drop of a dime because of a hacker? If investors don't feel confident, how could it ever thrive? The theory behind Bitcoin is ingenious, but as always, the devil is in the details. And right now, the details just aren't there to show that this is a viable alternative at the present time.
  • Liberal
    Independent
    Durham, NH
    Are you sure you want to delete this post?
        
    Probably not, unfortunately, but it should be I believe.

    At least when the US Treasury prints money people know what is behind it even if there is no real value. Who knows what's behind Bitcoin? Could be the Republic of a Tea for all we know with King Kruiz as it's leader(;
  • Liberal
    Independent
    Durham, NH
    Are you sure you want to delete this post?
        
    Sorry it got posted twice and I can't delete the second one!
  • Other Party
    Nebraska
    Are you sure you want to delete this post?
        
    jared an old saying comes to mind: "If something sounds too good to be true it probably is."

    Maybe bitcoin is just the latest version of the old Ponzi scheme, and those things have been around as long as people have been on earth. Bernie Madoff made, and stole, billions. How did he become so successful? People wanted to believe what he was selling, that's how.

    Where there are people with money there will be people trying to take it, and by any means necessary.

    Greed is a powerful motivator.
  • Center Left
    Independent
    Central, FL
    Are you sure you want to delete this post?
        
    http://www.nbcnews.com/business/business-news/head-online-currency-exchange-found-dead-singapore-n45101

    Last week over 500 million was lost. The above story indicates there's still big troubles in the industry.
  • Other Party
    Nebraska
    Are you sure you want to delete this post?
        
    ..."still big troubles in the industry"...

    What industry is that? The Ponzi scheme industry? The fake currency industry?

    ..."over 500 million was lost"...

    Was it lost or was it stolen? There are lots of people in this world who would kill for way less than 500 million.