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Will Greek Finance Minister Varoufakis Support Cryptocurrency In Greece? 253

giulioprisco writes New Greek Finance Minister Yanis Varoufakis, former Economist-in-Residence at game developer Valve Corporation, sees something like Bitcoin — or, more likely, a state-controlled "Fedcoin" — possibly playing a role in the (necessarily creative) rescue of the Greek economy. "The technology of Bitcoin, if suitably adapted, can be employed profitably in the Eurozone," he said.
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Will Greek Finance Minister Varoufakis Support Cryptocurrency In Greece?

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  • by Anonymous Coward on Sunday February 22, 2015 @10:00AM (#49105175)

    Will Greek Finance Minister Varoufakis Support Cryptocurrency In Greece?

    No

    As obvious as the question is stupid.....

  • Why? (Score:4, Informative)

    by Richard_at_work ( 517087 ) <richardprice@gmail3.14159.com minus pi> on Sunday February 22, 2015 @10:13AM (#49105215)

    Greece doesn't need a currency, it needs liquidity - a crypto currency won't bring that. The entire current issue is not about which currency to go for, its how Greece keeps paying its creditors - if they can't service their current debts, their ability to borrow goes through the floor, and a crypto currency isn't going to reverse that. Greece can't back its own crypto currency with anything it has a monopoly on either because it doesn't have anything that valuable.

    • That's why it's time to purge the books. The banks can easily afford it. The most they might lose is a fleet of new jets and yachts, and they might have to buy cheaper hookers and drugs. The 'debts' are predatory and fraudulent.

      • No they can't.

        It will cause a great depression not seen since WWII. Reason being is the way the books are counted at the banks. Imagine the game of hot potato in kindergarten? Now imagine each time you caught it counted as an asset. When you throw it it counted as another asset.

        Debt = assets. Not liabilities today??

        See the problem? So since everyone is in a web of IOUs you close one down and it impacts the others and the house of cards collapss in a domino effect hence 2008 financial crises. Difference is w

    • If you have your own currency you can print money. That gives you liquidity, at the cost of massive currency devaluation. Currency devaluation will make Greek exports cheaper and imports more expensive- and both will greatly benefit local industry and services, creating local jobs and economic growth. Switching to their own currency will fix all their problems, unless you are rich.
      • That worked well for Zimbabwe, hasn't it?

      • Hmm, sounds like a variation of Smoot-Hawley in that it makes imports more expensive to the benefit of local companies.

        And we all know how well Smoot-Hawley worked, right?

        It should also be pointed out that Weimar Germany went that route once too. And that worked almost as well as Smoot-Hawley....

      • by gclef ( 96311 )

        There's one problem it won't fix: the Greek debts to EU are not going to shift to the a currency just because Greece does. The debts to the rest of the EU will remain in Euros, and if the Greek "new Drachma" devalues massively compared to the Euro, the relative loan repayments in new Drachma will go up correspondingly.

        Greece can't print their way out of the loans. They can print their way to cheaper exports, yes....but the can't print their way out of the loans.

        • There's one problem it won't fix: the Greek debts to EU are not going to shift to the a currency just because Greece does. The debts to the rest of the EU will remain in Euros, and if the Greek "new Drachma" devalues massively compared to the Euro, the relative loan repayments in new Drachma will go up correspondingly.

          And the reason a financially independent Greece would keep paying Euro loans is...?

          Frankly, Euro was doomed from the beginning. As long as national currencies could float relative to each oth

          • by siddesu ( 698447 )

            I want to see how a "financially independent" Greece does, really, except it won't be pretty. If the historical record is any indication, they'll be the third-poorest Balkan nation, ahead of maybe Macedonia and Albania but behind everybody else, with a GDP per capita at a healthy 15-20% of the EU-12 average and an economic growth in the low 50 points of one percent when times are exceptionally good.

            Unless they have another coup d'etat or, maybe, get bought wholesale by Istanbul or Moscow with all the expec

      • by itzly ( 3699663 )

        What about the stuff they don't produce locally and have to import, like such vital things as oil and gas ?

        • Russia might just be interested enough in having an ally inside the EU to consider striking a deal. I could well see Greece dropping any kind of embargo on the grounds that if the EU shits on me, I'm under no obligation to play along with their embargo anymore.

      • If you have your own currency you can print money. That gives you liquidity, at the cost of massive currency devaluation.

        Oh dear. First, Greece is on the Euro - they can't print more money.

        Second, money is just a representation of value/wealth. It is not value/wealth in and of itself. The true value is productivity. Anything you do to alter the money supply changes nothing if productivity is not altered. All that happens is you just add or subtract a zero to every number used in the accounting boo

    • Greece doesn't need a currency, it needs liquidity - a crypto currency won't bring that.

      Actually, what is needs is a lack of liquidity. It needs to live within it's means. If it's overextended then
      maybe bankrupcy is the right thing to do. A crytpcurrency might help if it can't be manipulated and used
      to print new money. I wouldn't say bitcoin is super stable at the moment but a stable currency backed by
      something that can't be faked would go a long ways to fixing greece and the other economies that like
      to print their own money instead of balancing their budgets.

    • This.

      Monopoly money by another name would stink as bad.

  • The lax tax moral of the Greek was together with the huge number of public servants an important reason their economy faltered.

    The government of this game developer wants to re-employ many of the laid off people so fixing the tax system is probably the only option they have left to keep the country from again falling over.

    And such a currency can include many safeguards to ensure taxes are going to be paid.

    • Re:Taxation (Score:4, Interesting)

      by JBMcB ( 73720 ) on Sunday February 22, 2015 @10:37AM (#49105343)

      My favorite story about Greece's problems:

      In the 90's a governmental committee was formed for the sole purpose to close a particular dam. After a decade, the dam was closed and demolished. That committee still exists. They don't go around closing other dams, they, I assume, just make sure the dam is still closed.

      Source: Planet Money

      • If you think this kind of thing doesn't happen everywhere you are deluding yourself. How many Yucca Mountain studies have been done by now?

        • That was because the house majority leader at the time was from Las Vegas.

          Needless to say the locals heavily oppose it in their backyard.

    • Fact: Greece has less government employees per capita than Germany.

      • Germany also has one of the worlds highest per capita of government, but they collect taxes. Interestingly Greece actually spend significantly more on military than Germany per capita, that is the sort of shit that gets them in this mess. When you have such insanely high levels of government you have to be incredibly careful on how you run your economy and ensure you have a healthy tax base that actually pays tax.

        • Why did you think Merkel was kowtowing to Putin regarding Ukraine? Germany has cut their armed forces substantially since the fall of the Soviet Union. Just look at the amount of Leopard 2 tanks they sold to other countries including Greece. The Germans today have less Leopard 2 tanks in their army than the Greeks!

          That's why Putin can do whatever he damned pleases.

          That's one of the reasons the Greeks are miffed at Germany. A large fraction of the Greek government expenses were spent in German military hardw

  • Whatever they do (Score:2, Interesting)

    I just hope they hold up and tell the banks and Germany to go to hell. That is what they were elected for. Now, if they do, there could very easily be another military coup ordered by those banks. Unfortunately, it looks like compromise for the benefit of financial institutions is still the only thing on the menu. This 'crypto-currency' thing looks like a diversion.

    • by Teun ( 17872 )
      The Greek economy is still extremely weak and needs support to grow, going it alone is not realistic.

      Greece gets that support from the EU, their only alternative is this guy Putin and he has already been seen in Athens.

      • Did you read that notice about the formation of the BRICS bank [wikipedia.org]? It is supposed to start operating in the middle of next year. Basically the BRICS are creating the XXIst century equivalent of COMECON as a counter to the G7 nations.

  • by Guy From V ( 1453391 ) on Sunday February 22, 2015 @10:39AM (#49105365) Homepage

    I'm pretty sure the River Styx freezing with Aphrodite and Helen of Troy ice skating naked while Dionysus hands out brews and bags of trainwreck is less mythological than the possibility that Greece's economy will start looking up with the current megasocialist nanny state political mindset going on over there. "Crypto" currency is right, like...literally.

    • "Crypto" is also a terrible misnomer for cryptographically secured currencies :-)

      They aren't hidden. They are public. BitCoin only works when the entire transaction ledger is available to all it's users.

      In contrast, banks keep their ledger as private as possible. Historically this stems from the fact that you had to keep it secure - or people would just alter it. Then the secrecy became something that people relied on and almost more important than the security.

    • Harsh, but cryptic.

    • by AmiMoJo ( 196126 ) *

      People got fed up paying for the mistakes of bankers and politicians. They decided to put an end to it, and look out for themselves. The government is supposed to be the will of the people, and work for their benefit. Now it is, now it does.

  • For the same reason that it wouldn't work in Argentina. Any successful cryptocurrency gets its tradable value from the perception that the money supply is strictly limited, as in the days when currencies were based on the issuing country's gold reserve. For a cryptocurrencies,money supply is limited by some publicly available and testable mathematical formula.

    For any government whose dreams exceed its revenue, this means instant and long-lasting austerity. It would be like the Euro, but even stricter.

  • As it will be worth less than the paper it is printed on if they default on their debt which they plan on doing.

Long computations which yield zero are probably all for naught.

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