[cryptography] Bitcoin in endgame

John Levine johnl at iecc.com
Thu Feb 23 01:41:12 EST 2012


> I would also argue the Wall Street Bankers would have been happy
> to legitmize BitCoin if they got a cut (confer: derivatives).

Hmmn.  You know how painful it is when finance types pontificate
about cryptography that they don't understand?  Well, ...

Let me just say that it is not a bug in the US financial system that
there are provisions for unwinding bank transactions, nor that there
is a central bank with the authority and ability to increase and
decrease the money supply.  We spent several centuries doing it the
other way before Bagehot wrote Lombard Street.

The crypto model of Bitcoin is extremely clever, but the financial
model would have been state of the art in about 1500 AD.  The collapse
due to external attacks, both the botnet mining, and the various
well-publicised thefts of bitcoins and the failures of various bitcoin
markets was utterly predictable.  As I said a while ago, they're not
money, they're pet rocks.

R's,
John



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