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Bitcoin The Almighty Buck

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.'"
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Rand Paul Suggests Backing Bitcoin With Stocks

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  • Stocks? (Score:3, Insightful)

    by KermodeBear ( 738243 ) on Friday May 02, 2014 @08:56AM (#46898253) Homepage

    something with intrinsic value, like stocks

    Stocks have no more intrinsic value than our paper currency.

  • by Anonymous Coward on Friday May 02, 2014 @08:57AM (#46898261)

    At least ones that don't pay dividends.

  • Problem... (Score:4, Insightful)

    by MickyTheIdiot ( 1032226 ) on Friday May 02, 2014 @09:00AM (#46898277) Homepage Journal

    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.

  • by Anonymous Coward on Friday May 02, 2014 @09:05AM (#46898321)

    ... and "colored coins"? Please correct me if I'm wrong.

  • Re:History (Score:5, Insightful)

    by gl4ss ( 559668 ) on Friday May 02, 2014 @09:11AM (#46898351) Homepage Journal

    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.

  • by blackraven14250 ( 902843 ) on Friday May 02, 2014 @09:17AM (#46898385)

    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)

    by jythie ( 914043 ) on Friday May 02, 2014 @09:24AM (#46898439)
    The better question is, are his supporters stupid? Generally one does not get to be that powerful by being stupid, while we mock them politicians are usually quite intelligent, but that tends to be hidden behind closed doors. What the public generally sees is a carefully crafted image designed to appeal to certain voter blocks, a persona if you like. Ran Paul's stupidity is just a role he plays based off analysis of people who vote for him.
  • Re:Stocks? (Score:5, Insightful)

    by CreatureComfort ( 741652 ) on Friday May 02, 2014 @09:29AM (#46898469)
    Um...those don't have "intrinsic value" either. That's not to say that they aren't valuable or necessary, but you'll find the value of ice in January in Siberia is very much different than the value of the same ice in Arizona in June. So while each of the things you list may have values at a certain times and places, it is still entirely "subjective" value.
  • by Dragonslicer ( 991472 ) on Friday May 02, 2014 @09:44AM (#46898591)
    In other words, Libertarians believe that the government should only have "enough" regulation. Guess what, that's what almost everyone believes. There's just disagreement on the definition of "enough".
  • by Anonymous Coward on Friday May 02, 2014 @09:52AM (#46898661)

    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)

    by Trepidity ( 597 ) <> on Friday May 02, 2014 @10:04AM (#46898747)

    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)

    by i kan reed ( 749298 ) on Friday May 02, 2014 @10:06AM (#46898771) Homepage Journal

    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)

    by Anonymous Coward on Friday May 02, 2014 @10:10AM (#46898813)

    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)

    by PopeRatzo ( 965947 ) on Friday May 02, 2014 @10:25AM (#46898937) Journal

    This is just Rand Paul channeling Hank Johnson.

    Seriously, it's more like Rand Paul channeling Peter Griffin.

    "Lois, I just spent all our savings on lotto tickets!"

  • by Bob9113 ( 14996 ) on Friday May 02, 2014 @10:34AM (#46899015) Homepage

    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)

    by fermion ( 181285 ) on Friday May 02, 2014 @10:37AM (#46899047) Homepage Journal
    It makes sense in a world where one assigns values corporations and does not believe in the US. This comes from the same place that the gold standard comes from. In the world as it currently exists, the United States is a meaningful and important place made up of people who select a governement. As an expression of our value, faith, and worth we put out a currency. The currency reflects the innovation of our country by expanding as the capacity of our country expands. In fact the currency expands a bit faster which puts a pressure on the people of the country to innovate, and a negative incentive to save excessively, but rather to invest in innovation. OTOH, as stated, the gold standard ties a country to existing resources. There is an existing amount of gold, and short of governement regulation to set the value, does not reflect the innovation of a country. The gold standard insures that those with resources, in this case gold, are always going to better of than those who merely can innovate. Likewise, the Bitcoin is independent of incumbent forces and is free to increase and decrease in value based on those who value it. By backing it with incumbent retailers, you are limiting it the values of existing commodities, rather than seeing growth in future innovation. This is very bad because future innovation almost guarantees that the value of incumbent retailers will fall, in the same way that Walmart almost put Kmart and Sears out of busines. I do give him credit for trying to slip this by using stocks, which at least appreciate in value with innovation, instead of Gold like his father would have. The Gold Standard people just want to have King George come in a steal our stuff again.
  • by ciderbrew ( 1860166 ) on Friday May 02, 2014 @10:39AM (#46899063)
    Real money is backed by ..... A HUGE ARMY!
  • Problem is, libertarianism suffers from a No True Scotsman fallacy, promulgated by corporatists who use libertarian creeds to advance the supremacy of corporations (and therefore wealthy rent seekers who want to firmly establish a caste-based society), and in doing so undermine the entire philosophy. Just like most any other philosophy, really. Every system is perfect, until free will is introduced.
  • Re:Problem... (Score:4, Insightful)

    by pla ( 258480 ) on Friday May 02, 2014 @11:26AM (#46899551) Journal
    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.

    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)

    by gorzek ( 647352 ) <gorzek&gmail,com> on Friday May 02, 2014 @11:38AM (#46899705) Homepage Journal

    Anyone can be "principled." Whether those principles make sense or are sane in any way is the tricky part.

  • Re:History (Score:4, Insightful)

    by cusco ( 717999 ) <> on Friday May 02, 2014 @12:34PM (#46900311)

    He's a failed something anyway, if he thinks that stocks have "intrinsic value".

  • Re:History (Score:5, Insightful)

    by lgw ( 121541 ) on Friday May 02, 2014 @01:57PM (#46901069) Journal

    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.

When you are working hard, get up and retch every so often.