Rand Paul Suggests Backing Bitcoin With Stocks 404
SonicSpike writes:
"In a recent interview, Senator Rand Paul said there's one thing he would change about Bitcoin: it should be backed by something with intrinsic value, like stocks. He said, 'I was looking more at it until that recent thing [sic]. And actually my theory, if I were setting it up, I'd make it exchangeable for stock. And then it'd have real value. And I'd have it pegged, and I'd have a basket of 10 big retailers I think it would work, but I think, because I'm sort of a believer in currency having value, if you're going to create a currency, have it backed up by — you know, Hayek used to talk about a basket of commodities? You could have a basket of stocks, and have some exchangeability, because it's hard for people like me who are a bit tangible. But you could have an average of stocks, I'm wondering if that's the next permutation.'"
Stocks? (Score:3, Insightful)
Stocks have no more intrinsic value than our paper currency.
But Rand, stocks don't have real value! (Score:3, Insightful)
At least ones that don't pay dividends.
Problem... (Score:4, Insightful)
The problem is that this is a classic "inside the corporate bubble" reaction to bitcoin. One of the supposed ideas of bitcoin is to not link money to governments. Since corporations are super-important to mindless bots like Rand Paul, the solution is, of course, to link them to corporations. If there is anything worse than linking the monetary system to governments, if you would be linking them the corporations that even worse about selfishness and tilting the playing field towards themselves at all costs.
Re:Breaking News: Rand Paul Invents... (Score:4, Insightful)
... and "colored coins"? Please correct me if I'm wrong.
Re:History (Score:5, Insightful)
I don't own bitcoin nor have I ever used bitcoin for anything.
but this Rand guy seriously misunderstands the whole fucking concept. stock? ? just sell your bitcoin and buy some stock with that money. if the stocks value was tied to bitcoin, you might just as well just own bitcoin instead of the stock. if the stock presented some other value(in dollars or bananas) that would be a direct tie in to something else.
backing it up with gold or other valuables or anything that would need some company to adhere to some arbitrary value for the bits would destroy the whole concept(or at the very least transform it to some airline miles system bs) and you might just as well dig egold out of the grave...
so what the guy would like would be a centrally deployed currency, you know, like bus card money. beats me why he thinks that would be better or more novel - of course then there would be a company to shut down to shut down the use.
Re:Breaking News: Rand Paul Invents... (Score:5, Insightful)
Libertarians do not believe markets should be totally unregulated. What they do believe is that government regulation should have one goal, which is to increase transparency.
Come on, don't make shit up. That's not the definition of libertarianism, and neither is it the goal of many libertarians.
Re:What the hell? (Score:5, Insightful)
Re:Stocks? (Score:5, Insightful)
Re:Breaking News: Rand Paul Invents... (Score:5, Insightful)
Re:Breaking News: Rand Paul Invents... (Score:0, Insightful)
Libertarians inevitably support the 'freedom' to pollute and exploit my environment without consequences. Because government regulation is bad.
If someone threatens my air/water supply, I should be at liberty to kill them.
Re:Huh? (Score:4, Insightful)
In a kind of theoretical sense that's true, but in practice the ownership theory of stock value only is really workable for large stockholders, who could actually force decisions to be made, such as selling off assets. If you own 100 shares of Google, you do have a claim on Google's assets if it's ever liquidated, but you have no ability to force the liquidation. Your theoretical claim may therefore be indefinitely deferred (even for a century or more), which greatly reduces its present value as a tangible commodity with intrinsic value.
For the foreseeable future, the only real value of Google shares that you can actually realize is the market value, i.e. what someone else is willing to pay for the stock. Apart from selling the stock on the stock market, for whatever someone is willing to pay you, there is really no practical way to turn 100 Google shares into anything else of value. So I view them as having mainly market value, with a weak, distant connection to something of intrinsic value.
Re:History (Score:5, Insightful)
A. He's a senator.
B. He's younger than bill gates or steve jobs by almost a decade, and only a decade older than Sergey Brin and Larry page.
I think we can safely say every stupid thing comes from his brain rather than his generational cohort.
Re:History (Score:0, Insightful)
Idiot. He calls himself a Libertarian, someone who steers away from government regulators and towards competing private suppliers, and someone who embraces freedom.
Then he says the fiat currency issued and controlled by the U.S. Government that is backed by nothing is somehow O.K. while Bitcoin, a fiat currency backed by nothing but also free from government tyranny, needs some backing.
For this reason alone I will never vote for that ass clown.
Re:History (Score:5, Insightful)
Seriously, it's more like Rand Paul channeling Peter Griffin.
"Lois, I just spent all our savings on lotto tickets!"
Re:Breaking News: Rand Paul Invents... (Score:5, Insightful)
Also, I don't think he thinks we should legally require that any currency be backed by Gold and Silver, he just thinks its a good idea.
Gold has no more intrinsic value than Bitcoin. The physical demand for gold as a conductor, plating material, and for jewelry is a tiny fraction of the amount we pull out of the ground. Its value is entirely backed by its rareness, which is exactly the same as Bitcoin.
The next bit is a little harder to grasp, but I promise you it is worth your time to seriously reflect on: The value of gold is subject to extreme fluctuations (look at the past 30 years). That means if you peg your currency to it, your currency will fluctuate in value. Fluctuations in the value of a currecy make it less reliable as a temporary store of wealth. That, in turn, increases the friction on trade in that currency. Pegging the dollar to gold would make the US less productive internally because of reduced consumer confidence, and encourage the world to shift away from using the dollar as the dominant currency for international trade.
Re:Huh? (Score:5, Insightful)
Re:'Real' money uhu (Score:5, Insightful)
Re:Breaking News: Rand Paul Invents... (Score:4, Insightful)
Re:Problem... (Score:4, Insightful)
As the bigger problem here, Paul's solution to this "problem" would effectively allow third parties to create equity in a company out of thin air. Something tells me Walmart/IBM/whomever wouldn't take kindly to every Bitcoin miner on the planet diluting their stock value.
This would only work if it functioned essentially like corporate scrip, where Walmart alone could create Bitcoins, and they could then give customers their change in BTC. Even then, they probably wouldn't want to do so, because again, it directly dilutes their stock - Or put another way, it makes "giving change" roughly equivalent to paying a microdividend (albeit in the form of a liability whose value they have some influence over, equity in themselves).
Re:History (Score:4, Insightful)
Anyone can be "principled." Whether those principles make sense or are sane in any way is the tricky part.
Re:History (Score:4, Insightful)
He's a failed something anyway, if he thinks that stocks have "intrinsic value".
Re:History (Score:5, Insightful)
He's a failed something anyway, if he thinks that stocks have "intrinsic value".
Stocks are the only thing with intrinsic value: ownership of the means of production. Everything else is convention, but the ability to make something that someone else wants or needs is intrinsic value.