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The Almighty Buck Bitcoin

Nobel Prize-Winning Economist Says Bitcoin 'Ought to be Outlawed' (cnn.com) 461

Bitcoin "is drawing harsh criticism from Wall Street investment firms," writes Slashdot reader rmdingler -- and even from some prominent economists. CNN reports: The harshest assessment came from Nobel laureate Joseph Stiglitz, who said that bitcoin "ought to be outlawed. Bitcoin is successful only because of its potential for circumvention," he told Bloomberg TV. "It doesn't serve any socially useful function." Robert Shiller, who won a Nobel for his work on bubbles, said the currency appeals to some investors because it has an "anti-government, anti-regulation feel. It's such a wonderful story," he said at a conference in Lithuania, according to Bloomberg. "If it were only true."

Wall Street titans were getting in on the action, too. Goldman Sachs CEO Lloyd Blankfein told Bloomberg that the currency serves as "a vehicle for perpetrating fraud." Billionaire investor Carl Icahn said on CNBC that it "seems like a bubble." The digital currency previously attracted the derision of JPMorgan boss Jamie Dimon, who called it a "fraud" that would "eventually blow up." Warren Buffett has warned of a "real bubble."

Wednesday the price of bitcoin shot past $11,000 -- just ten days after rising past $8,000.

Nobel Prize-Winning Economist Says Bitcoin 'Ought to be Outlawed'

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  • I see (Score:5, Insightful)

    by nospam007 ( 722110 ) * on Sunday December 03, 2017 @08:07AM (#55667489)

    " Bitcoin is successful only because of its potential for circumvention,"

    Like cash?

    • Re:I see (Score:4, Insightful)

      by Spamalope ( 91802 ) on Sunday December 03, 2017 @09:39AM (#55667781)

      "potential for circumvention,"

      Theft by fiat currency devaluation.
      When it happens to them, it's asset impairment/taking a haircut on the investment.
      When it's you, it's a good thing for the economy that we've reduced the value of your 401k. Expanding the money supply, quantitative easing, TARP - you should feel good about having your saving stolen. Why, anyone who seeks to protect their wealth is almost committing a crime - like 'circumvention', say.

      • Re: I see (Score:2, Insightful)

        by Anonymous Coward

        Theft by fiat currency devaluation.

        When it happens to them, it's asset impairment/taking a haircut on the investment.

        When it's you, it's a good thing for the economy that we've reduced the value of your 401k. Expanding the money supply, quantitative easing, TARP - you should feel good about having your saving stolen. Why, anyone who seeks to protect their wealth is almost committing a crime - like 'circumvention', say.

        Are you on drugs?

        Does your 401(k) invest in cash? You really should get a clue and diversify.

        The only people hurt by currency devaluation are those who hoard currency. Which is basically nobody. Normal people invest in assets other than cash.

    • Re: (Score:2, Informative)

      by Anonymous Coward

      "It doesn't serve any socially useful function."
      Except to allow society to conduct direct sale without outside meddling. What next? Outlawing direct trade? Even yard sale items have to go through government escrow?

      I think this guy is just angry because he missed the boat. Or he's out of touch. Or both.

    • by bidule ( 173941 )

      What's the largest denomination?
      How thick is $10,000 in that denomination?

      Can you mail (let alone email) an inch thick of 100 dollar bills?
      And that's a small amount.

  • I See (Score:5, Funny)

    by Anonymous Coward on Sunday December 03, 2017 @08:13AM (#55667499)

    Goldman Sachs CEO Lloyd Blankfein told Bloomberg that the currency serves as "a vehicle for perpetrating fraud."

    Whereas Goldman Sachs is a vehicle for what exactly?

    • Re:I See (Score:4, Insightful)

      by BlueStrat ( 756137 ) on Sunday December 03, 2017 @10:23AM (#55667921)

      Goldman Sachs CEO Lloyd Blankfein told Bloomberg that the currency serves as "a vehicle for perpetrating fraud."

      Whereas Goldman Sachs is a vehicle for what exactly?

      It's the same reason the US government gets upset when foreign governments spy on and try to manipulate and abuse the US population.

      They resent competition.

      The US government has over time become little different in basic behavior than street gangs that sell illegal drugs. Both will happily ignore legalities when convenient and quickly employ violence to defend their 'turf' to protect their illicit business preying on the general population.

      At this point it's like the US is being run by the (D)rips and c(R)uds.

      Strat

    • Re:I See (Score:5, Insightful)

      by Freischutz ( 4776131 ) on Sunday December 03, 2017 @10:25AM (#55667929)

      Goldman Sachs CEO Lloyd Blankfein told Bloomberg that the currency serves as "a vehicle for perpetrating fraud."

      Whereas Goldman Sachs is a vehicle for what exactly?

      Goldman Sachs and the rest of that entire system is, to quote Adam Smith, a vehicle for perpetrating a "conspiracy against the public'. Bitcoin is a way of circumventing that system which is why the system feels threatened by it. I don't think there is a real way to kill Bitcoin or rather what it represents. I've heard people like Stiglitz try to argue against Bitcoin because it 'helps terrorists' or 'facilitates criminality' but so do cash and uncut diamonds, those excuses are just fig leaves. The real threat is that Bitcoin facilitates the circumvention of the established gate keepers of the financial system. Even if Goldman Sachs and the rest of that ilk get their bought politicians to kill Bitcoin people will find other forms of portable wealth and use it as a way to circumvent the established financial system and the harder Wall Street and the politicos try to block these circuitous routes the more motivated people will become to invent new ones.

    • It's not "fraud" when the people in power do it, you see.

    • Re:I See (Score:4, Interesting)

      by guruevi ( 827432 ) <evi AT evcircuits DOT com> on Sunday December 03, 2017 @11:32AM (#55668139) Homepage

      Whatever GS does is considered or will eventually be considered legal. There's a big difference, if the FBI comes knocking at your door, you're going to jail for a long time before you even get a trial, if the FBI comes knocking at their doors, they're going to make a press release and the laws change.

  • News at 11 (Score:5, Interesting)

    by Gaygirlie ( 1657131 ) <gaygirlieNO@SPAMhotmail.com> on Sunday December 03, 2017 @08:16AM (#55667503) Homepage

    Companies making big bucks out of traditional currencies are upset when a currency they're not making big bucks out of appears on the scene, totally unpredictably!

  • by pots ( 5047349 ) on Sunday December 03, 2017 @08:18AM (#55667507)
    Yes, of course Bitcoin is a scam. But that isn't all there is to it, there is a need that it fills: we currently lack any kind of digital cash. Banks and other payment processors are currently taking about 3% of all the money spent on the internet, and this is an enormous amount of money that's just disappearing with virtually no return. A lot of internet vendors with thin margins jumped on the Bitcoin bandwagon for just this reason.

    What we really need, of course, is a real government-backed digital currency. I can think of a few reasons why this hasn't been implemented yet, but it will happen eventually.
  • Obligatory Gandhi (Score:5, Insightful)

    by DontBeAMoran ( 4843879 ) on Sunday December 03, 2017 @08:23AM (#55667515)

    First they ignore you, then they laugh at you, then they fight you, then you win. - Mahatma Gandhi

    We're at step #3 now.

  • by sinij ( 911942 ) on Sunday December 03, 2017 @08:24AM (#55667521)
    Wallstreet is upset that tech is cutting out the middle man and getting directly into reckless financial speculation game.
  • Neither do you. (Score:5, Insightful)

    by king neckbeard ( 1801738 ) on Sunday December 03, 2017 @08:24AM (#55667523)

    It doesn't serve any socially useful function.

    Neither do you, or just about anybody else brought up in this conversation.

  • by quonset ( 4839537 ) on Sunday December 03, 2017 @08:33AM (#55667547)

    Goldman Sachs CEO Lloyd Blankfein told Bloomberg that the currency serves as "a vehicle for perpetrating fraud."

    If anyone should know about perpetrating fraud, it would be Lloyd Blankfeind. And his buddy Jamie Dimon as well.

    • Goldman Sachs CEO Lloyd Blankfein told Bloomberg that the currency serves as "a vehicle for perpetrating fraud."

      If anyone should know about perpetrating fraud, it would be Lloyd Blankfeind. And his buddy Jamie Dimon as well.

      Is your point that we shouldn't listen to him because he knows something about fraud, or that we should listen to him because he knows something about fraud?

      In these days of howaboutism, is some times gets hard to tell!

  • by Sqreater ( 895148 ) on Sunday December 03, 2017 @08:33AM (#55667549)
    The fraud that is being perpetrated is not Bitcoin but the fiat money cranked out by scammer governments that seem to think they can do anything they want to to the public, including ruin the concept of money itself. Bitcoin is connected to nothing? What is the dollar connected to now? Huh? Less than nothing. Bitcoin at least is limited and if the dollar is accepted now it is only because people want to accept it. There is no basic "value" to it. It is not connected to gold. It is not connected to national economic output. I feel a good deal of the interest in bitcoin comes from it being a vote of no confidence in the phony, scam financial system that the finance and investment community and governments have worked so hard to create. Oh, and Schiller and others are terrified that this possibly disruptive technology will obsolete their knowledge base, prizes, and destroy their income. They no more get it than Buffett got microcomputers or the internet.
    • Responsible central banks adjust the money supply to the size of the economy so that its value is relatively stable, even though there is no direct connection to economic output. Some would argue that controlling inflation / deflation is the central banks only real function. The value of money is not what any fool would pay for it (like BTC or even gold); it is reasonably stable because it is controlled.

      The vast majority of interest in Bitcoin is from people hoping to make a quick buck riding the bubbl
      • Responsible central banks adjust the money supply to the size of the economy so that its value is relatively stable

        Even if they keep the value stable, that doesn't mean the process is fair. Some guy in a suit goes bankrupt on a $10 billion loan, and the central bank adds another $10 billion to keep the money supply well adjusted. Sounds good, but the net effect is to take a little bit from everyone with a savings account, and deposit it in the pockets of a few.

      • Re: (Score:2, Insightful)

        Responsible central banks

        Why not talk about unicorns while we're at it?

      • Re: (Score:3, Interesting)

        by Sqreater ( 895148 )
        People don't "trust their currency," they use it because they have to. And "Responsible central banks adjust the money supply to the size of the economy so that its value is relatively stable," really? Pumping 4 trillion made-up dollars into the world to keep failed banks and investment houses tottering along as zombies is keeping it "relatively stable?" And allowing derivatives, made up by investment houses and pushed into every nook and cranny of the world of finance, to be used as bank reserves, that is,
    • Let me ask you a simple question. Will you lend me a Bitcoin today for 6 months at $500? At the end of 6 months, I will return it to you and of course you keep the $500.

      How about 1 month, 3 months, or a year? At which point will you say no?

    • The fraud that is being perpetrated is not Bitcoin but the fiat money cranked out by scammer governments that seem to think they can do anything they want to to the public, including ruin the concept of money itself.

      All money since the beginning of money is fiat money. Whether it be gold, jewels, cowrie shells, or Yap stone Rai.

      Although, I'd be curious if you had the examples of non-fiat money. If salt was rare, that might be a good choice. Something essential to life that we'll die if we don't have it is needed to be non-fiat. Fortunately or unfortunately, it is pretty common and easy to get these days.

  • pot kettle (Score:5, Insightful)

    by crimson tsunami ( 3395179 ) on Sunday December 03, 2017 @08:36AM (#55667557)

    Goldman Sachs CEO Lloyd Blankfein told Bloomberg that the currency serves as "a vehicle for perpetrating fraud."

    Well he would know...

    JPMorgan boss Jamie Dimon, who called it a "fraud"

    Ditto

    • Wow those are some pretty awesome endorsements. I was on the edge thinking this overstuffed puppy was about to vomit suds, but now it looks like I know where to put some beer money.
    • Goldman Sachs CEO Lloyd Blankfein told Bloomberg that the currency serves as "a vehicle for perpetrating fraud."

      Well he would know...

      JPMorgan boss Jamie Dimon, who called it a "fraud"

      Ditto

      Your point? Agree that it is fraud because these experts call it fraud and avoid it, or invest like you're the third chimp trying to get on the ark, because this is experts in performing fraud talking?

  • Just because he didn't invest into B himself.
  • by JoeyRox ( 2711699 ) on Sunday December 03, 2017 @08:57AM (#55667623)
    Stiglitz believes those who endeavor to protect their rights such as privacy must be doing something illegal. It's the old "it shouldn't matter if you have nothing to hide" defense of infringing on civil liberties. He also claims bitcoin has no societal value - the fact people are using it in society is prima facie evidence he's wrong about that as well.
  • by GlobalEcho ( 26240 ) on Sunday December 03, 2017 @09:00AM (#55667631)

    A good currency should do a few things:

            - Have low "friction" in transactions (in terms of ease, time, and transaction costs)
            - Be near-universal in acceptance
            - Provide a good store of value
            - Be difficult to counterfeit

    Bitcoin does very well on the last point and, in some senses, also does well on the first point due to the fact that it is a digital currency.

    These properties are generally achieved by currencies through some form of artificial scarcity. Gold, for example, is valued well above its utility in industry.

    Bitcoins version of artificial scarcity is poisonous, in the sense that its mechanism invites society to waste resources (electricity, silicon chips) on generating scarce integers no one else has. The world will be far better off once we are using digital currencies with different forms of artificial scarcity.

    I think it's hard to argue Bitcoin is treated much as a currency even now, except perhaps by the ransomware authors. Generally it is being purchased as an "investment", which lately bears similarity to some historical crazes and bubbles.

    • The world will be far better off once we are using digital currencies with different forms of artificial scarcity.

      True, that would be the holy grail. The problem is designing a system that doesn't cost a bunch of effort to validate correct transactions, but would make it really hard to validate incorrect ones.

    • Why would you bother to write all that and start with a blatant falsehood?

      Bitcoin is horrible in terms of ease of use, transaction time, and transaction cost.

      • Depends what you're comparing it against. For same-country transactions? It's not as good as it used to be.

        For sending value to someone in another country? It wins on transaction time and cost by a huge margin. And ease of use too because anyone with a computer/tablet/smartphone and an internet connection can set up its own wallet, no need for banks or similar.

        Heck, even sending money from Canada to the USA, apart from credit cards or Paypal, is slow and expensive. And we're next to one another and really s

    • You forgot two points.
      -easy replacement of destroyed units
      -inflatable to forgive past mistakes.

      The first is easy to understand I think. If someone runs away with their Bitcoins and dies at the bottom of the sea those coins should effectively be lost. The value would be spread across the remaining but there quickly comes a point of limit for a currency that is naturally limited in its units.

      The second is a bit more difficult. An employee gets paid 2 coins today and 2 far into the future rather than 3 coins t

      • but there quickly comes a point of limit for a currency that is naturally limited in its units.

        There is no limit to how far you can divide bitcoin, because we can always upgrade the protocol to support smaller units.

        Basically being able to print and destroy currency allows you some flexibility to borrow from good times to patch the bad times; making the roller coaster less bumpy and stay on the rails.

        Great. Let's keep fiat currencies for day to day life. And we'll use bitcoin for those people who want to save something up for later, and don't want to watch their wealth get inflated away. Much like gold, but with some added benefits that you can verify its authenticity, transfer it over the internet, and divide/combine it.

  • Swedish Banking Prize has been successfully hijacking the name of prizes established by Alfred Nobel since the 60s
  • Bitcoin isn't useful for circumvention, every single transaction ever made in it is publicly available. All it takes is seeing where someone spent it on something real to connect people together, it's much more traceable than cash. It's not even harder to enforce save for the fact the central banks aren't the ones controlling it, which for that alone they hate. Governments and banks take a percentage of every single transaction, be it purchasing food, paying rent, being paid income, even sitting idle in
  • Goldman Sachs CEO Lloyd Blankfein daring to speak unironically about "perpetrating fraud" is probably the funniest thing I've read here today.

  • is that this comes from a representative of a profession thatâ(TM)s ought to be outlawed due to itâ(TM)s lack of net positive contribution to humankind - an economist.

  • Contradiction (Score:5, Insightful)

    by bradley13 ( 1118935 ) on Sunday December 03, 2017 @09:50AM (#55667807) Homepage

    Bitcoin is successful only because of its potential for circumvention," he told Bloomberg TV. "It doesn't serve any socially useful function."

    Circumventing governments is a socially useful function. Virtually all modern governments have grown to be far too powerful. Bitcoin represents a small but important struggle against one, small aspect of this power. Likely it will be either squashed or (worse) absorbed, but...maybe not. There's also a vanishingly small chance that people will realize that modern governments need to be massively reduced in scale, focusing on the essential needs of their constituents, rather than the global fantasies of the elite.

    Geez, that doesn't sound half bad. Maybe I should become a propaganda writer :-/

  • They hate a currency that they donâ(TM)t control that they canâ(TM)t monitor.

  • The major "representatives" of the financial world object to anything which is beyond their control. No telling how much wealth has been transferred from the people of the world to the banking industry and their respective controlling governments. All fiat currencies eventually go to zero value - i.e. fail as a store of value. When governments print more base currency than there is actual value (or wealth) to back up the currency, the currency goes into inflation. In our current times, do some research on
  • by zerofoo ( 262795 ) on Sunday December 03, 2017 @01:21PM (#55668501)

    "doesn't serve any socially useful function"

    Bitcoin is a medium of exchange - nothing more. The entire purpose of a medium of exchange is to facilitate the exchange of goods and services. That is the very foundation of civilization.

    What more "socially useful" function exists?

    Statists like this nobel idiot dislike anything that takes away power and control from the state. By that measure, crypto-currencies perform the most socially useful function there is - limiting the power of government over free people.

  • by Gonoff ( 88518 ) on Monday December 04, 2017 @03:33AM (#55671085)

    A number of crooks and criminal organisations want Bitcoin to "go away".

    That sounds like the strongest possible reccomendation for the increased use of cryptocurrencies. The CIA, GS and the rest of the Wall Street Gang are thr prime causes of most problems in the world. If they had less control and influence, there would be fewer famines, war s etc.

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