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Bitcoin The Almighty Buck

Rand Paul Suggests Backing Bitcoin With Stocks 404

Posted by Soulskill
from the back-it-with-waffles-instead dept.
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.'"
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Rand Paul Suggests Backing Bitcoin With Stocks

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  • Huh? (Score:5, Interesting)

    by nine-times (778537) <nine.times@gmail.com> on Friday May 02, 2014 @08:57AM (#46898263) Homepage

    Can someone explain how this isn't silly? He wants it backed by intrinsic value, which I think may be missing the point of Bitcoin, and his example of the perfect thing with intrinsic value is "stocks"?

    I'm sure this guy has some fans who can explain why this makes sense, but it just seems like more evidence that he's completely out of touch and doesn't know what he's talking about.

  • by Charliemopps (1157495) on Friday May 02, 2014 @09:11AM (#46898355)

    ...the concept of the "mutual fund".

    I can almost smell his clutch burning as he mentally shifts back and forth between "currency must be free of government intervention" and "currency must be backed by gold or silver"...

    Another person that doesn't understand Libertarian ideals. What a surprise. 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. Laws that require Credit Card companies to display their terms in clear, easy to understand ways for consumers are good laws in Libertarian eyes. Laws against insider trading, secret deals, etc... are all compatible. Where they draw the line is when the laws dictate prices or interest rates etc. 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. Whatever the standard US currency is should be backed by tangible assets but legally requiring such a system for a currency unregulated by the government like Bitcoin would not be Libertarian. That said, no one, not even Ron or Rand Paul, is 100% Libertarian. We all have our own ideas that are a mix of different political ideologies and there's nothing wrong with that.

  • by nimbius (983462) on Friday May 02, 2014 @09:11AM (#46898357) Homepage
    People forget that bitcoin became popular during the advent of wikileaks, lulsec and the activism of Aaron Schwartz. Tying bitcoin to an exchange means the minute you start a website that publishes sensitive government secrets like warrantless wiretapping, Anone who feels compelled to help your efforts is just as vulnerable to government detention and surveillance as you. The point of bitcoin, dogecoin, and other cryptocurrency is to prevent the government from quietly telling banks to refuse your transactions on the basis of your dissent, and ferrying you off to some resort in cuba for waterboarding and lemon pepper fish.

    And unrelated: Bitcoin is dead, for all intents and purposes. a combination of shit-tier security and unaccountable exchanges made it what it is today. switch to doge or something else, keep your wallet encrypted, and make frequent withdrawals.
  • by Anonymous Coward on Friday May 02, 2014 @09:18AM (#46898397)

    Bitcoin is a joke at this point and trying to fix it with anything risks the anything, but even if it wasn't, Rand Paul may be completely, diametrically wrong with this idea. I found this article to be well worth a read, almost ten years ago:

    http://mises.org/daily/1595

    Good fun read, but it takes on the nearest equivalent economic situation involving a currency under siege.

  • by Charliemopps (1157495) on Friday May 02, 2014 @09:33AM (#46898491)

    Sure there is. Granted, there's about a zillion forms of Libertarianism, just like everything else. But I'm talking about the currently popular version of it (the form I support), Noe-Classical Libertarianism that bases its economic policy on laissez-faire capitalism. The idea being that individual liberty is more important than most things. Government restrictions of business restrict the liberties of the owners of those businesses. That's why regulation is frowned upon. But whats frequently forgotten is that Libertarian ideals have a fundamental mistrust of both government AND business. Corporations tend to construct deals that mislead individuals and there-by restrict their liberties. Hence the desire for laws that increase transparency. Libertarians support laws that let individuals make informed decisions. They do not support laws that make it illegal for an individual to make a mistake and sign a terrible contract. They just want to ensure that the persons fully aware of what they are signing when they do so.

    Remember, one of the largest groups at those "Occupy" rallies were Libertarians. I know it's hard to fit Libertarians into your black and white democrat/republican world view, but the fact is most libertarians are more socially liberal than most democrats... an more fiscally conservative than most republicans. I've been a libertarian since the early 90s and I have to say it's been an honor being hated by both political parties all this time.

  • Violence. (Score:5, Interesting)

    by Ihlosi (895663) on Friday May 02, 2014 @09:33AM (#46898493)
    Other than fresh water, oxygen, shelter, and sustenance, anyway.

    Violence (and any means increasing the potential violence an actor has at his disposal) has intrinsic value.

    In fact, in any system with potentially malicious actors, a currency must be backed by some degree of violence. Otherwise, the malicious actor can just take the currency by force (if he considers it valuable).

  • by 140Mandak262Jamuna (970587) on Friday May 02, 2014 @09:44AM (#46898585) Journal
    He thinks bitcoin is something like a fiat currency, backed up by something. He does not realize, bitcoin is simply a public, open digest of transactions, sort of like a public bank ledger.

    The best way to describe bitcoin in the stocks world is like the thirdparty stock registrars. Most people do not take possession of stock certificates or even bond certificates when they buy those instruments. Typically a thirdparty company maintains a register where it takes "possession" of the stocks on your behalf, and "delivers" them to the buyer when you sell them. Often your buyer and seller also would a member of the same registrar and so all that happens is your account is debited or credited with so many shares of such and such a company for every transaction. Mutual funds are required by law to keep the instruments they own with a registrar. It is even possible for you to exit a mutual fund by taking your share of the stocks and bonds instead of cash. To avoid triggering taxes, people could take the distribution in "kind" and move them to their name, probably under the same registrar.

    So imagine having a completely open registrar, all the transactions are completely transparent and multiple parties verify and tally the ledger and confirm the final balances of all the members, that is bitcoin. Bank ledger keeps dollar amounts for each account. Stock registrar maintain multiple stock/bond shares for each account/member.

  • quantum libertarian (Score:4, Interesting)

    by globaljustin (574257) <justinglobal AT gmail DOT com> on Friday May 02, 2014 @12:50PM (#46900479) Homepage Journal

    I won't discount that there may have been some libertarians at Occupy rallies

    yeah, at Occupy Portland it was a group of 4-5 poly-sci majors dressed in business clothes walking around with "Ron Paul 2012" signs

    see, "what is a libertarian?"

    then it's chaos...

    there are popular definitions, dictionary definitions, academic definitions...then the interest groups who use wedge issues that link certain policies to "libertarian" in popular media...arg!!

    chaos! a full-on linguistic apocalypse

    so then, it becomes a nothing word...sort of like a quantum particle in a state of quantum flux...Schodinger's Libertarian if you will

    it's not until the "libertarian" is forced to **define policies they support** that we open up the system and see if the Cat is really a democrat or republican or just ignorant of how the government works in general

  • Re:History (Score:3, Interesting)

    by Anonymous Coward on Friday May 02, 2014 @02:08PM (#46901195)

    Im just downvoting everyone who criticized Rand Paul on the "intrinsic value" thing, because he didnt say that. That was inserted by the submitter / editors, presumably to attract this sort of criticism from people who didnt read the article.

    Thanks for contributing, tho!

Never try to teach a pig to sing. It wastes your time and annoys the pig. -- Lazarus Long, "Time Enough for Love"

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