Bitcoin and Crypto and DeFi and Sometimes Ayn Rand

[Michael Stuart Kelly]

Bitcoin and Crypto and DeFi and Sometimes Ayn Rand

It looks like Bitcoin and Crypto are not well understood in O-Land.

We have discussed this in a few different threads, especially this one: Why Don't Objectivists Seem to Care about Cryptocurrency?, and I think it deserves its own thread.

So here are a few comments from elsewhere on OL, then we are off to the races.

 

 

On 8/9/2020 at 12:43 AM, Michael Stuart Kelly said:

I've read this article carefully and I will read it another three times in the near future just to get the jargon down.

A Beginner’s Guide to Decentralized Finance (DeFi)

I have to get into smart contracts, dapps, dapp browsers and the like.

That is where finance is going. I have not doubt at all.

 

And this to get a philosophical foundation:

On 3/18/2021 at 10:11 AM, Michael Stuart Kelly said:

Even though this interview is done by a leftie, the view presented here is closer to an Objectivist and libertarian dream--that of separating the economy from the government--than anything I have seen to date.

Jimmy Dore is the interviewer, and one of the people I am studying right now, Max Keiser, is the Bitcoin expert he interviews.

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I don't like them calling crony corporatism "capitalism," but at this distance, I can cut them some slack.

I don't think they realize how close to Ayn Rand they are.

Rand was known as a proponent of the gold standard, but almost nobody I see these days realizes she was proposing that as a suggestion for store of value. Not as an absolute truth. Gold, at the time she was championing it, was the best thing around to meet the conditions specified in, say, Capitalism: The Unknown Ideal.

Listen when Jimmy asks Max what the difference between gold and Bitcoin are and try to remember those specifications. (I might do an article on this just to highlight the quotes.) The advantages of Bitcoin sound like a dream-come-true according to the very canon of Objectivism and according to what reams of libertarians talk about. Bitcoin severs the government tie from people's money. 

. . .

... try to hold your nose on the leftwing stuff. When you look deeper, you will see that they are pulling the teeth from collectivism by imagining they are pulling the teeth from capitalism.

They are pulling the teeth from centralized control. That's what they're really doing.

. . .

... just like I went all in with President Trump based on my worldview informed by Objectivism, I am very close to going all in with Bitcoin (and blockchain technology in general) for the same reason.

 

This was funny and it deserves to be repeated.

On 3/17/2021 at 3:58 AM, Michael Stuart Kelly said:

About all those ruling class people trash talking Bitcoin right now, here is my favorite video from way back when (2015). It's only about a minute long.

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Notice that this guy's last peak (in 2015) was about eleven hundred dollars per Bitcoin.

 

Just to mention NFT:

On 3/17/2021 at 3:02 PM, Michael Stuart Kelly said:

... another blockchain thing is taking off like wildfire right now. It's called NFT, meaning Non Fungible Tokens. This is way more recent than cryptocurrency and one NFT recently sold for $69 million.

 

That is enough to get the ball rolling.

I've been doing a dive into this and, even though I am essentially a beginner, I have come across some fascinating things that are worth sharing within the O-Land frame.

At the very least, I will try to have this thread provide a kind of overview education on parts and the whole of this new technology. Sharing as I learn kind of thing...

I hope this thread will not get boring with overkill on minutia. I will do my best on my end to avoid that. 

Please chime in if this interests you.

Michael

[Michael Stuart Kelly]

On that other thread, a very interesting question came up.

On 3/22/2021 at 8:56 PM, tmj said:

The question is , are cryptocurrencies an objectively good store of wealth.

I gave an extended comment (see here), but now I figured it's time to get more precise. 

I am not an expert in finance and money, so I use Investopedia for looking up technical information.

I found a term there very close to "store of wealth." It is called:

Store Of Value

Here is the quick and dirty definition.

Quote

A store of value is an asset, commodity, or currency that maintains its value without depreciating.

All right! 

Now I can talk about this and know what I am talking about.

 

Using that definition, I went out and did a few searches for info.

And lookie what I found. Just look at this market cap chart from here: Market capitalization of Bitcoin from April 2013 to February 22, 2021.

The price in dollars per Bitcoin follows a similar trajectory since the only way to increase or decrease the dollar price is to buy and sell Bitcoins. Right now there is about a trillion dollars in Bitcoin and about 100 million owners.

According to the Investopedia definition of "store of value," that does 'er. Bitcoin has shown to be an excellent store of value.

Michael

[Strictlylogical]

1 hour ago, Michael Stuart Kelly said:

On that other thread, a very interesting question came up.

I gave an extended comment (see here), but now I figured it's time to get more precise. 

I am not an expert in finance and money, so I use Investopedia for looking up technical information.

I found a term there very close to "store of wealth." It is called:

Store Of Value

Here is the quick and dirty definition.

All right! 

Now I can talk about this and know what I am talking about.

 

Using that definition, I went out and did a few searches for info.

And lookie what I found. Just look at this market cap chart from here: Market capitalization of Bitcoin from April 2013 to February 22, 2021.

The price in dollars per Bitcoin follows a similar trajectory since the only way to increase or decrease the dollar price is to buy and sell Bitcoins. Right now there is about a trillion dollars in Bitcoin and about 100 million owners.

According to the Investopedia definition of "store of value," that does 'er. Bitcoin has shown to be an excellent store of value.

Michael

 

One possibly major difference between units of money which are themselves units of objective wealth/value and instruments/systems for store and exchange like Crypto, is that for the former you need only know of reality, specifically, human nature and the basic need and or use for the unit of wealth/value independent of any specific person, group of persons, or organization of persons, or systems etc., to know your units have objective value, but for the latter, you need to trust the people who set the system up, the group of people who agree to participate in that system, trust that the system works, both in the abstract/theory and in terms of actual implementation with operating infrastructure (hardware, software, electric grid etc) and will never fail. 

 

For the former you depend on your independent knowledge of reality, 

For the latter you are dependent upon everyone having to do with the currency system, the mechanical/computational system implementing it, and everything that the system itself  would depend upon.

 

Whether or not this difference is a big deal to you... I suppose will depend upon your sense of life.

 

[Aside: Physical gold, although ridiculous to carry around, was and has been used at the worst times in history, to circumvent totalitarian rule, and preserve wealth even during the collapse of economies and the effective fallings of civilization itself...  such a high benchmark might prove too high in today's world, but at least the alternative should be immune from the eletists/oligarchs, big tech, and big government...  perhaps China is a good test-bed for how untouchable Crypto can be... is there a darkweb or an undernet there?  I wonder what do they use there as currency on the blackmarket?]

[Michael Stuart Kelly]

SL,

Are you saying that the Internet and computers that run on it are not real?

To me they exist. I can see them, hear them, and often touch them. 

Also, I don't know what sense of life has to do with this. We are identifying a medium of exchange, not an attitude.  

Here's something to think about regarding ALL money anywhere at anytime. You were not born with money. You only get it from other people. (Read Rand carefully and you will see she says the same thing in other words.)

Every penny in your pocket came from the hand of someone else, no matter how distant from you that person may be.

That means every penny you own represents a RELATIONSHIP. Some relationships are so distant you have a hard time visualizing them (although they still exist), and some are so normal you are not even aware of them, and some are close and loving, and some are even oppressive. Some are quite dishonest, too.

The money anonymizes these relationships when others look at it, but the relationships are not anonymous to you. You generally know who your money came from. And you know who you hand over money to.

The following brought a smile to my face. You asked about the dark web:

5 hours ago, Strictlylogical said:

I wonder what do they use there as currency on the blackmarket?

Now here comes the smile.

The answer?

Mostly Bitcoin.

Why?

No government, which means no law enforcement.

It's a little trickier than that these days because of something called "point of entry" (the exchanges). The connection between your computer and the exchanges can be surveilled, and many exchanges demand you hook them to your bank account, although that surveillance stops once you and your money are running within the blockchain itself.

Here's a term cryptocurrency people often use to describe closed systems like Bitcoin: individual sovereignty, or individual economic sovereignty. Separation of state and the economy.

Michael

[Michael Stuart Kelly]

Here is some solid information on Bitcoin. Max Keiser recommended the site. It's hosted by a guy named Jameson Lopp.

BITCOIN INFORMATION & RESOURCES

Here's something fun about that page. This is how I first arrived there (according to Max's instructions).

Type the following in your browser URL and hit enter:

bitcoin.page

Boom. You are on Lopp's Bitcoin info page.

 

It's a simple domain redirect, but it's still cool. (Dayaamm... I feel like a baby peek-a-boo.)  

btw - That entire site is a goldmine of information. I'll be hanging out there for some quality education time...

 

Next, a 10 part TV series by Max and Stacy (half hour episodes):

To The Moon

The entire series is at that link (RT link).

It is about the history and philosophy behind Bitcoin and the players involved. As of this posting, I have only seen the first episode and I feel like I got a whole lot smarter just from watching it. I will be devouring the other 9 shortly.

Here's just a taste. Remember the famous phrase "quantitative easing"? Here in O-Land, there was a lot of talk about this being the start of the end of the economy. After all, "quantitative easing" is a bullshit way to say "print more money to bail out banks." This was around 2008. Well, right around that time was when the first Bitcoin was mined. So society at large got the poison and the antidote at the same time.

(This just came to mind... Back in my drinking days, I used to say that about the Bloody Mary cocktail. The poison causing the hangover was vodka and the antidote was tomato juice. Later, when I got into cachaça, a Brazilian rum rotgut with one hell of a kick, I grafted this thinking onto the new context. I would take a handful of aspirin before I got down to serious drinking. Poison and antidote.  )

For convenience, here is the first episode, Episode 1: The Genesis, on YouTube and the YT links for the following episodes.

Episode 2: The OG Years
Episode 3: Permissionless
Episode 4: Unconfiscatable Store of Value
Episode 5: Honey Badger Don't Care
Episode 6: 'Blockchain, not Bitcoin'
Episode 7: The Blocksize Wars
Episode 8: UASF
Episode 9: When Lambo?
Episode 10: Bitcoin, not Blockchain

This series was presented on TV in 2019. I don't know what channel(s) it aired on. The film set is at The Associated Press in NYC.

Another fun fact. When I saw the first episode, I noticed here was no date given for when the series was made. But one guy interviewed said the market cap was at $65 billion. So off I went digging. That's how I found the market cap graph in the second post above. The $65 billion market cap happened in both 2017 (followed by continuing to rise, then a dip) and 2018. Then it started going to the moon.  Right now it's at about a trillion dollars.

Enjoy.

Michael

[Michael Stuart Kelly]

Alex Jones is going all in on Bitcoin.

MAX KEISER: THE BITCOIN CIVIL WAR IS HERE

He likes the idea that it can't be confiscated and that money is moving from central banks to Bitcoin. And that the governments can't do anything about it.

He also likes the increase in value.

He said Max and Stacy have been trying to get him on board for several years, but he was always reticent because he didn't know enough about it. Now he has studied it and sees what is happening in the world. He says he's kicking himself because he could have funded his entire operation with it.

Alex is very creative money-wise. When he got banned off all mainstream Internet platforms and kicked off most of the forms of monetization, he started selling his own line of nutraceuticals, which took off like wildfire. 

Now he is all in with Bitcoin and is going to use it alongside his nutraceuticals business to fund Infowars.

Michael

[Michael Stuart Kelly]

Here is Michael Saylor explaining how Bitcoin is--moneywise--the most powerful human enterprise ever implemented anywhere at any time and how it cannot be replaced or fail. He says it is more powerful than Google of Facebook in sudden profitability and this is proven by history. Both of them took several decades to reach a trillion dollars. Bitcoin needed only 12 years.

Michael Saylor, for those who don't know, is the guy who is successfully convincing the corporate world to use Bitcoin for currency and investment.

He recently held a convention attended by corporate big-wigs from all over the world. Shortly after the convention, there was a spike in corporate adherence (and corporate adherence has continued). And the price of Bitcoin went up.

 

Michael

[Michael Stuart Kelly]

Here is my favorite quote of the day, one that I received from Max Keiser via email.

btw - This is Max and Stacy.

Now the quote.

Quote

Bitcoin is up 102% so far this year (with a move to $220k coming). Do you honestly think I give two fucks about what’s happening in the White House?

 

But wait! A second quote by Max in the same email was just as good.

Quote

Much has been made of India's proposed Bitcoin ban. But they should realize by now: governments don't ban Bitcoin, Bitcoin bans governments! The Streisand effect is in full force with millennials on the subcontinent rushing to stack sats.

btw - A "sat" is short for a "Satoshi," which is a fraction of a Bitcoin.

Also, this quote linked to this article: India’s Millennials Embrace Digital Gold Despite Proposed Bitcoin Ban.

(This article uses "digital gold" as a metaphor for Bitcoin.

Notice that the Indian millennials are acting by free choice. The government is acting by decree.

Of what use is a decree when everybody refuses to obey it?

Michael

 

[Michael Stuart Kelly]

Finally I came across some Ayn Rand for real in Bitcoin.

I rarely watch Atlas Society videos, but I did this one.

This blew my socks off.

I had never heard of Tim Draper before, but now I have a new person to look into.

My gut tells me this guy is going to be important for some of my own plans.

And I think I am going to start to watch some more Atlas Society videos, too.

Michael

 

EDIT: Tim Draper (Wikipedia), Draper University (Wikipedia), How to be The Startup Hero: A Guide and Textbook for Entrepreneurs and Aspiring Entrepreneurs by Tim Draper (referral link).

[Michael Stuart Kelly]

I suppose I could talk about the recent plunge Bitcoin suffered, but now it is going straight back up.

(Several events caused the plunge, but as the current rise shows, cannot maintain it.)

Here is the correct way to think about Bitcoin (unless you are trying play the arbitrage game which is the same thing as gaming in a casino).

 

Michael

[Peter]

A business owner on Fox was saying he uses crypto currency but sometimes has problems converting it to U.S. dollars.

[ThatGuy]

FYI/FWIW:

"Discussing Bitcoin and Liberty with Yaron Brook and Stephan Livera"

Join us Monday for this live event featuring ARI chairmanYaron Brook :"While governments and central banks are throwing billions at the economy to mitigate the effects of the lockdowns and the pandemic, Bitcoin is reaching new heights.

 

"For some, cryptocurrencies are a great investment; for others, they are a bubble that will soon burst. Many in the liberty movement, though, see Bitcoin and other cryptocurrencies as the path to more freedom and autonomy from the whims of the state and of central bankers.

 

"In this online event organised byObiektywizm.pl and supported byAyn Rand Institute Global

Yaron Brook chairman of the board of ARI, discusses withStephan Livera, Bitcoin podcaster and co-founder of the Australian Bitcoin education venture, all things related to cryptocurrencies and the prospects they offer for freedom."

https://www.facebook.com/AynRandInstitute/posts/10158718706894681

[Peter]

Michael wrote: Right now there is about a trillion dollars in Bitcoin and about 100 million owners. end quote

I may be an old fashioned scared-ee cat but would it be fair and correct to say Bitcoin is STILL backed up ONLY by demand? I can imagine it being criminalized in more restrictive countries like China or even the U.S. if the government sees a loss or evasion of tax dollars. “Remember the Alamo!” Signed, Georgie Russell, Davy Crockett’s sidekick.   

[Michael Stuart Kelly]

5 hours ago, Peter said:

... would it be fair and correct to say Bitcoin is STILL backed up ONLY by demand?

Peter,

Sure.

It's called laissez-faire capitalism.

And no government on earth can do anything about it.

They can try to criminalize it, but it won't work.

Michael

[caroljane]

On 4/9/2021 at 3:12 AM, Michael Stuart Kelly said:

Finally I came across some Ayn Rand for real in Bitcoin.

I rarely watch Atlas Society videos, but I did this one.

This blew my socks off.

I had never heard of Tim Draper before, but now I have a new person to look into.

My gut tells me this guy is going to be important for some of my own plans.

And I think I am going to start to watch some more Atlas Society videos, too.

Michael

 

EDIT: Tim Draper (Wikipedia), Draper University (Wikipedia), How to be The Startup Hero: A Guide and Textbook for Entrepreneurs and Aspiring Entrepreneurs by Tim Draper (referral link).

My gut tells me that those eyebrows are going to be the new orange combover.

This guy is going places, on those two obsidian wings!

[Peter]

3 hours ago, Michael Stuart Kelly said:

It's called laissez-faire capitalism.

And no government on earth can do anything about it.

They can try to criminalize it, but it won't work.

Rank	Country	Economic Freedom Score	Population 2021
1	Hong Kong	8.94	7,552,810
2	Singapore	8.65	5,896,686
3	New Zealand	8.53	4,860,643
4	Switzerland	8.43	8,715,494
5	Australia	8.23	25,788,215
6	United States	8.22	332,915,073
7	Mauritius	8.21	1,273,433
8	Georgia	8.18	3,979,765
9	Canada	8.17	38,067,903
10	Ireland	8.13	4,982,907
11	Lithuania	8.1	2,689,862
12	Denmark	8.1	5,813,298
13	United Kingdom	8.08	68,207,116
14	Estonia	7.96	1,325,185
15	Chile	7.96	19,212,361
16	Malta	7.94	442,784
17	Taiwan	7.94

[Peter]

America is a Capitalist / Mixed Economy (and high on the economic freedom list.) In other less free countries it is more like the novel, “1984.“ I can see “jail time” for not reporting bit coin usage in America, and the worst is yet to come. Peter

James Royal, Ph.D. Apr 26, 2021. Bitcoin Taxes in 2020: A Guide to Tax Rules for Cryptocurrency If you've owned or used bitcoin, you may owe taxes — no matter how you acquired or used it. Here’s how using bitcoin can affect your tax situation. With bitcoin, you can run afoul of the IRS in a few surprising ways, so it pays to learn the rules. The big picture? Bitcoin and other cryptocurrencies that you buy, sell, mine or use to pay for things can be taxable. Also, if your employer or client pays you in bitcoin or other cryptocurrency, that money is taxable income. You report your transactions in U.S. dollars, which generally means converting the value of your cryptocurrency to dollars when you buy, sell, mine or use it. Here’s more how using bitcoin can affect your taxes:

1. Bitcoin and other cryptocurrencies are property. In 2014, the IRS issued a notice declaring that for tax purposes, cryptocurrency is property, not currency. That may sound like a trivial distinction, but in this case it’s the basis for when the IRS decides whether individuals owe taxes. These bitcoin tax consequences revolve around what the government agency calls a “realization event.” Here's how it boils down: If you acquired a bitcoin (or part of one) from mining, that value is taxable immediately; no need to sell the currency to create a tax liability.

If you disposed of or used bitcoin by cashing it on an exchange or buying goods and services, you will owe taxes if the realized value (the sale price of bitcoin, for example) is greater than the price at which you acquired the bitcoin. You may have a capital gain that’s taxable at either short-term or long-term rates. “Many people think that there’s no tax consequences when they sell an object — it’s for personal use and they’re expecting to lose money on it anyway, whether it be a car, an appliance or another piece of property,” says Brian R. Harris, a tax attorney at law firm Akerman LLP in Tampa, Florida. “Many people aren’t in the mind-set of holding tangible objects for investment and then recognizing gains when they ultimately sell them.” “But if there’s been a gain from the bitcoin owner’s cost basis, there’s a tax liability,” he says.

[Michael Stuart Kelly]

Peter,

Here's a paradox for you.

If the IRS says you have to give them part of your Bitcoin, how are they going to confiscate it?

Torture?

The IRS is only going to know about any Bitcoin you have if you tell them or use an exchange hooked in to them through specific banks or, maybe, directly. Or get paid in Bitcoin by a person or company that reports the payment to them.

Otherwise, they simply will not know.

Michael

[Peter]

Michael prophesized, “Otherwise, they simply will not know.”

I think your nativity is a prod for someone to think of the most obvious consequences. Namely, the NSA, the CIA, and the IRS will know your deepest, darkest, dark web secrets.

From the Web. Conviction for evasion of taxes requires: Pay a Penalty. If you act with the purpose of avoiding or defeating any tax owed to the IRS, you could be fined up to $250,000. Even if you’re not formally charged with tax evasion, you will be assessed fines if you file your return more than 60 days after the due date. The failure-to-file penalty is 10 times more than the failure-to-pay penalty. So the IRS recommends that even if you can’t pay in full, you should file your tax return and pay as much as you can. Pay Interest, Face Criminal Charges, Go to Prison If you’re found guilty of tax evasion, you can go to federal prison for up to five years. Forfeit Your Social Security Benefits. Tax Lien on Your Property. Lose Your Property. Damage to Your Credit. Lose Your Passport.

And ta da! You will need to hire an attorney, possibly for money laundering. Peter

[Michael Stuart Kelly]

4 hours ago, Peter said:

I think your nativity is a prod for someone to think of the most obvious consequences. Namely, the NSA, the CIA, and the IRS will know your deepest, darkest, dark web secrets.

Peter,

So think of them.

It's your life.

I've lived in a country during massive inflation (about 80% a month) with a government that froze everybody's money (see here) to stop it. 

Not cool.

And when times like that come (which I believe are on the horizon for America and other countries throughout the world), government agencies get awfully incompetent. I've seen it up close.

Maybe a miracle will happen like a new virgin birth and all human beings will lose the evil and greed and lust for power in their hearts. Barring that, when the bad times come, the government will have to pay for law enforcement (thugs don't work for free) and it will not be able to do so by printing money, not when everyone will be plowing what they have into Bitcoin and DeFi.

So I'm not worried.

Let's see what happens...

Michael

[Peter]

6 hours ago, Michael Stuart Kelly said:

Let's see what happens...

Gosh I hope President Trump runs and wins in 2024. He created such hope. But when he lost . . . despair, hopelessness. Meanwhile Biden STRIVES to make us less free, worse off, and under totalitarian rule, etc. 

[Michael Stuart Kelly]

To me, this is proof positive that the authoritarians are afraid of Bitcoin.

Maher is claiming that the mining of Bitcoin will cause manmade climate change, it will raise the globe's temperature 2 degrees Celsius.

He sounds libertarian in some of his argument, but look in between the lines and you will see "elitist control" all over them.

Bitcoin is not confiscatable.

That makes collecting taxes a bitch.

Michael

[Michael Stuart Kelly]

For context, here is a post from a different thread.

On 4/30/2021 at 7:08 AM, Michael Stuart Kelly said:

Here is a typical way Max explains the philosophy.

Simple, clear and no ambiguity or hedging.

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One important point that Max has said many times, other cryptos are in some form or other centralized. Bitcoin is not and that makes it unconfiscatable.

I'm not crazy about Max's opinion of the US, but I do agree with many of his specific criticisms.

As to the US being afraid, from what I see, he's talking about US elitists, like the ones who sold out to China and stole the 2020 election, not normal everyday Americans.

Because of these last, Bitcoin will be strong in the US, especially once the dollar goes to shit.

Meanwhile, the elitists will start selling their mothers to try to stay on top. But, of course, Bitcoin will be a better deal.

 

 I love it when elitists (including Bill Maher) sense they are losing control of the commoners.

Michael

[Michael Stuart Kelly]

21 hours ago, Michael Stuart Kelly said:

I love it when elitists (including Bill Maher) sense they are losing control of the commoners.

Heh.

I found another great example.

One could ask, whose idea of civilization?

That of crony insider billionaires, or that of good productive people who want to go their own way?

 

Michael

[Michael Stuart Kelly]

I am cross-posting this from another thread since it involves some comments about Bitcoin and Objectivism.

12 minutes ago, Michael Stuart Kelly said:

10 hours ago, algernonsidney said:

I actually think it will still be at least twenty years before the dollar "goes to shit." Most of the countries in Central and South America guarantee that, for example. There are many other currencies that stink worse than the American dollar.

Chris,

I agree with you if President Trump or another problem-solving kind of person gets into office. If the political winds stay where they are, with the sheer amount of new money that has been created recently, I already have a good idea of what will happen. 

 

Brazil as a case study--indexes

Here's what happened in Brazil. A whole series of indexes started popping up. Some took inflation into account more than others. This was so the government and crony insiders could use the values from indexes that ignored inflation the most to pay its bills, and used the indexes that kept up with inflation to collect from people. The banks did this, too. they tried this crap with imports and exports and only managed to generate one crisis after another.

When a person in a foreign country realized he was only going to get half the money agreed on for his product, if he had not yet shipped, he didn't ship (unless there was a subsidy, but that's another issue). And people who wanted to buy product simply canceled orders when they found out they had to pay double the agreed amount due to index changes. Both essentially said fuck you and Brazilian politicians yacked up a storm to the people to make excuses.

There were so many indexes, there was even a dollar index and a "black market dollar" index published in the financial section of papers and openly talked about by politicians. In fact, the black market dollar index was one of the best indications of the true value of the Brazilian money, but you could not make contracts based on it that would stand up in court.

 

Brazil as a case study--new currencies

When the indexes scam didn't hold enough to keep the country from exploding, the wise ones governing the Brazilian monetary policy cancelled the old currency and issued a new one. Simple. Get rid of the old. Make the new. How did that work? Basically, they chopped off zeroes from one thousand so that 1,000 of the old currency equaled 1 of the new.

There was the real (before my time--this lasted to 1942), then the cruzeiro, then the cruzeiro novo, then the cruzeiro again (when I arrived in Brazil), then the cruzado, then the cruzado novo, then they recycled the cruzeiro again and so on. You can see the full list here: Brazilian currency. Wikipedia sucks, but it is still good for things like this.

Since the article is short, here's the full thing. Notice the last line.

Quote

The official Brazilian currency since 1994 is the Brazilian real (plural reais, sign R$, code BRL).

Through its history, Brazil had a number of other currencies:

• Portuguese real
• Brazilian real (old) (Rs$), pl. réis; from colonial times to 1942
• cruzeiro (first) (₢, Cr$) = 1,000 réis; from 1942 to 1967.
• cruzeiro novo (NCr$) = 1,000 cruzeiros; from 1967 to 1970
• cruzeiro (second) (Cr$) = 1 cruzeiro novo; from 1970 to 1986
• cruzado (Cz$) = 1,000 cruzeiros; from 1986 to 1989
• cruzado novo (NCz$) = 1,000 cruzados; from January 1989 to March 1990
• cruzeiro (third) (Cr$) = 1 cruzado novo; from 1990 to 1993
• cruzeiro real (CR$) = 1,000 cruzeiros; from August 1993 to June 1994
• real (modern) (R$), pl. reais = 2,750 cruzeiros reais; from 1994 to present

Thus, one modern Brazilian real is equivalent to 2,750,000,000,000,000,000 times the old real, that is, 2.75 x 10¹⁸ réis.

Expand  

I believe that's where the dollar is headed. I don't know what they will do about the name changes, but I bet something similar and maybe a little more nuanced will happen.

That will never happen with Bitcoin. It is constructed in such a manner that this can't happen. 

In fact, the mad rush into cryptocurrencies in general will probably slow down the fate of the dollar.

 

USA indexes

Also, the new USA indexes are already happening with more frequency than before--see here for example. Over time, newer and newer items on that list will appear. Then conditions for each index, such as one index will be used only for energy commitments, another will be used for government employees, another (a more official one) will be used for inflation, another for the maximum a person can earn in short-term capital gains, another for... and on and on... Each will come with new laws and regulations.

Some indexes (old and new) favor the ruling class crony insiders (and make them gobs of money) while others screw the middle class and non-insiders. There's as reason the top 1% exists and only seems to get richer daily by magic. These different indexes are--and will be--assigned by law.

That's the way this stuff works. This has nothing to do with capitalism. 

 

Back to Bitcoin

They can't do this to Bitcoin, although they can do it to any cryptocurrency that has a centralized foundation once they find the leverage point of the people at the center. And Bitcoin will not be able to be outlawed. They can try, but it won't take.

That is why a strong movement in the mainstream media against Bitcoin is now underway. The reality that Bitcoin is not issued by any bank or government or governing body, and it is totally severed from the state, is making the big bad dogs go crazy. They don't know how to confiscate it or index it by whatever they can make up in order to steal. 

 

To me, that's about as Objectivist as it gets. Maybe not in words and jargon, but definitely in concepts like objectivity (as opposed to power-enforced whims), individual rights and so on.

Michael