Apple details secure 'touchless' e-wallet strategy in patent filing

2»

Comments

  • Reply 21 of 25
    MarvinMarvin Posts: 15,264moderator
    Marvin, it's interesting that you both defend and undermine your own argument in the defense of the Federal Reserve and central banking in your own examples.

    Present central banking undoubtedly has to be fixed but I don't think decentralized currency is going to work. While it's not perfect, I think the best way forward is more regulation on centrally controlled currency.

    Governments are here to stay and need to be paid for. They will never accept taxes in bitcoins. They also won't pay staff in bitcoins. There won't be mortgage lenders using bitcoins nor will they accept mortgage payments in bitcoins.

    The supply is going to be limited - maximum 21 million coins - so they have to split the coins. I think it will be a very long time before it becomes stable and at its present value, that's a limit of $21b for everyone using it or if 1 million people use it, $2100 each. It's not enough. Either the value of the coins has to increase another 100-1000x within 10 years or it's going to have very limited use.
    The less valuable ones will flop, the better ones will succeed (we're seeing this with both Bitcoin and Litecoin).

    This will result in lost confidence in virtual currency as people see their investments disappear. Bitcoin is heavily dependent on computing power. If someone maps a mining algorithm onto a quantum computer, it can screw the whole thing up. They say they can adapt to this but it's not guaranteed.

    The other thing is that it's not backed by insurance. People need to feel security over their money. Banks cover savings up to $250k:

    http://www.bankrate.com/finance/savings/fdic-insures-bank-deposits-to-250-000-1.aspx

    Nobody is going to insure your quarter of a million dollar stash stored on a laptop and it can be stolen in an instant. You would never keep your life savings in your house, having the option to put them on a volatile storage drive that can be put into someone's pocket is not an improvement.
    One of the central reasons for the design of Bitcoin (I refer to the Bitcoin network) was to remove the corruption of currency from the hands of the few bankers and their political counterparts and incentivize the miners with mathematically planned rewards and inflation and incentivize users with liquidity and low or no cost fees that existing money transmitters can't touch.

    Central banks have lost the world's confidence. Bitcoin is the "currency competition" we need to keep people honest.

    It doesn't keep people honest though. It takes away regulation.

    http://www.businessinsider.com/report-ceo-of-major-bitcoin-exchange-arrested-2014-1

    I get that to some people governing bodies are the cause of all of society's ills and their solution is to get rid of this in order to create markets that compete on their own terms and no one else's. However, governments don't cause society's problems, they are an effect of them. When the free market fails to regulate itself adequately in the best interests of the people who the governing body represent, they pass laws in their best interests. If they could avoid getting involved in issues, they would. The free market however does very stupid things sometimes:

    http://abcnews.go.com/Health/HeartFailureNews/newborns-family-learns-pre-existing-conditions-apply-birth/story?id=10218514&singlePage=true

    There are some things like people's lives that you can't just throw under expenses on a balance sheet nor can you just wait until companies make the mistakes and people gradually over the course of decades migrate to the companies that don't. Sometimes there aren't enough options. Every step of the way, the more that the free market and the public fail, the larger governing bodies become to sort it out.

    You can say in some cases it's ineffective and more damaging but not in most cases and undoing it just reinstates the problem. This is most evident in the financial industry, which is not nearly as regulated as it should be. Taking away any form of regulation is the worst thing to do. There's a TV series American Greed that highlights some of the big frauds:

    http://en.wikipedia.org/wiki/List_of_American_Greed_episodes

    Time after time it's 1 person or a handful of people convincing dozens of investors to part with their money and most of them live it up while paying back small amounts and lying that their money is growing - they feed on the fear that inflation devalues their savings. When the money inevitably runs out, you have these people, many retired, who have lost everything and sometimes the punishments are very small. The main character in the recent Wolf of Wall Street movie had a very small punishment of 22 months, his partner 34 months for their $200m scheme:

    http://www.dailymail.co.uk/news/article-2543561/I-wonderful-life-Partner-crime-real-life-Wolf-Wall-St-boasts-luxury-lifestyle.html

    That's what happens with too little regulation - they put everything in their wives' names. I can't see how it would improve with a decentralized currency with no insurance, people ready to inflate or deflate its value at a moment's notice, able to avoid taxes, do illegal trades with it. At least with banks, there's some kind of a paper trail when fraud happens.
  • Reply 22 of 25
    Marvin, since you come from the point of view that freedom of choice and a free market are almost always bad, why aren't you arguing that no individual choice and complete control by government central planners are good...you know, like in the old Soviet Union or in the China of yesteryear? Oh, that's right. It's because central planning and corrupt markets don't actually work.

    Every time regulation is piled on and free market principles are undermined, corruption and stagnation set in.

    By the way, our economic and business environment today is NOT free market capitalism. It's more akin to crony capitalism and corporatism, with a number of recent examples bordering on fascism (where the state controls the means of production in the interest of "saving jobs"). Major difference. The system you decry is the one already corrupted by government involvement. More corruption won't make a bad system better.
  • Reply 23 of 25
    MarvinMarvin Posts: 15,264moderator
    Marvin, since you come from the point of view that freedom of choice and a free market are almost always bad, why aren't you arguing that no individual choice and complete control by government central planners are good...you know, like in the old Soviet Union or in the China of yesteryear? Oh, that's right. It's because central planning and corrupt markets don't actually work.

    Why does it have to be black and white? Some regulation is good, some freedom is good and not in the same ratio in every area. If my ebooks cost 10% more, I can deal with it. If there are 10% more nutjobs running around the streets ready to shoot me in the face or stab me, more regulation would be preferred.

    Everyone with any decent quality of life is wholly dependent on the monetary system and it needs to be heavily regulated so that the system doesn't get skewed heavily in favor of people in control of it at the expense of people who aren't.
    Every time regulation is piled on and free market principles are undermined, corruption and stagnation set in.

    When reasonable regulation is removed, the free market causes harm to people such as when regulations in the financial industry were reduced or removed. Here's an article that would back up what you're saying although I'm not entirely sure what the conclusion is - if the failure happened regardless of any missing regulation then it was caused by the free market alone so they'd have to be advocating regulation where there wasn't any. Either that or they somehow think what happened was a good thing and shouldn't have been prevented:

    http://www.forbes.com/sites/objectivist/2012/11/12/why-the-glass-steagall-myth-persists/

    The two regulations mentioned were Glass Steagall and debt to equity allowance. The first is dismissed as not being relevant and that's fine but the second is ignored.

    If you have an unregulated financial system where the government can't track what you're doing inside your business, you can lie to people. This is happening with bitcoin transactions just like with cash. If you had an unlimited debt to equity allowance, you would be able to leverage your assets by 100:1 or more. You can wrap up loans and sell them to people with a false rating and then make a bet on them failing.

    Now you might say that's fine, let it fail and people won't use them again. But you aren't putting any restrictions on the collateral damage.

    For every Enron, Madoff, Worldcom, AIG, Lehman, there are hundreds/thousands of victims. When you see the example of the guy linked earlier with sports cars, an expensive home, a luxury lifestyle as a reward for fraudulent activity, that came at the expense of victims and it's going to encourage other people to do the same. Why work a crappy job when you can scam people out of the money they earned and live in luxury? Promote the luxury of the few while creating misery for the many.

    With just enough freedom, you can keep the government away from what you're doing so they don't know about the scam, you can create a safety net for when it goes wrong like putting assets in the names of relatives or off-shore accounts.

    It sounds great when you are the one perpetrating the scam. But if you ever become the victim, then the cry comes out 'why did no one protect me from it?'. This thought doesn't cross the minds of wealthy people often because money's their safety net. As long as there's money, lawyers can be paid, workers can be paid, family can be supported.
    The system you decry is the one already corrupted by government involvement. More corruption won't make a bad system better.

    I disagree with the assumption that more regulation automatically means more corruption but describe your better system. I assume it will involve almost no taxation of any kind. Money, goods and services are exchanged directly and no profit/loss records need to go to a 3rd party as long as the company is private. Almost everything would be private right? Schools free to teach whatever they want, the wealthiest kids go to the best schools. Healthcare all private and if you have enough health issues, then they are free to deny you treatment as it conflicts with their profit motive without government telling them otherwise. Law enforcement can't be private as there's the potential for conflicting factions but less regulation means they won't deal with traffic violations, go whatever speed you want, drink and take drugs. Run around the park naked, everybody get naked, everybody have a smoke indoors/outdoors, right next to a baby being breastfed in public, wherever. All freedom, no government.

    I'm pretty sure it's all been tried, the laws and regulations that exist today are there as a response to the failure that happened when they weren't there. The regulation that has existed over the monetary system was there to prevent it failing and creating too many victims. Some regulation is ineffective, some of it is circumvented but removing all of it is not the solution because it's been done and it failed.
  • Reply 24 of 25

    I'm seeing a lot of assumptions and pointers to many sources as if they were gospel, so I'm going to have to address a few items at a time.

     

    You said:



    Some regulation is good, some freedom is good and not in the same ratio in every area. If my ebooks cost 10% more, I can deal with it. If there are 10% more nutjobs running around the streets ready to shoot me in the face or stab me, more regulation would be preferred.

     



     

    I believe in constitutional government. Nowhere in the Constitution does it allow for our government to be involved in the creation of a fiat currency. Nowhere. The Fed was formed as a means of circumventing our very own Constitution. Government is restricted from issuing fiat currency for good reason. They are only allowed to mint gold coins for use as currency, not fraudulent paper money backed by the (alleged) "full faith and credit of the United States...what does that even mean, anyway? The massive corruption of the Federal Reserve (a privately owned institution, incidentally) is what has contributed to the decline of this country and to the ruin of our economy. The dollar has lost something like 95% of its "value" since 1913.

     

    I have no idea how you think "regulations" are going to keep someone from stabbing you, but if you chose to arm yourself you could have a chance to defend yourself in such an event.

     

    You said:



    If you have an unregulated financial system where the government can't track what you're doing inside your business, you can lie to people. This is happening with bitcoin transactions just like with cash.


     

    Bitcoin is essentially an "open ledger" so the perspective that "you can lie to people" is strange. "Lie" in what sense? Bitcoins are designed to act like cash and to remove the central bank from the currency. It's doing exactly what it was designed to do.

     

    You also said:



    When reasonable regulation is removed, the free market causes harm to people such as when regulations in the financial industry were reduced or removed.

     



     

    The only functions of government that are allowed are those described in the Constitution. All other functions are left to the people and the states. This is difficult to understand and comprehend because we have become a nation of out-of-control government and regulation, which (to us in our present day and age) seems "normal". I'm for minimal, Constitutional government (sometimes called "Minarchism"), which is in line with the original intent of the founders of this country. In a constitutional government, taxation still exists. Enough to carry out their only legitimate functions. If you check Wikipedia for a definition of "Minarchism" you'll see what I'm talking about.

  • Reply 25 of 25
    MarvinMarvin Posts: 15,264moderator
    Government is restricted from issuing fiat currency for good reason. They are only allowed to mint gold coins for use as currency, not fraudulent paper money backed by the (alleged) "full faith and credit of the United States...what does that even mean, anyway? The massive corruption of the Federal Reserve (a privately owned institution, incidentally) is what has contributed to the decline of this country and to the ruin of our economy. The dollar has lost something like 95% of its "value" since 1913.

    The problem with using metals as I noted above is that the supply is limited and the population and production grows so there has to be a way to split it. This leads to fractional reserve banking and loans with interest. It has to or the supply runs out. This is going to be the same with bitcoins. It's harder to do with bitcoins because some people will have a hard time trusting a 3rd party bitcoin proxy but there are already different coins and they can easily issue fiat currency as a proxy as that will always be legal tender.

    In order for bitcoins to replace standard currency, they have to be cumulatively worth at least as much as $1.2 trillion:

    http://www.newyorkfed.org/aboutthefed/fedpoint/fed01.html

    Right now, bitcoins are at 12 million coins worth $800-900 so $10.8b. There will be 21 million produced so they have to go up in value by about 50-100x to match the USD alone.

    The meaning behind fiat currency being backed by a government is their ability to tax the people. Ultimately the value is in production. That doesn't mean that production is entirely controlled, it means that if the entire country stops producing, the government fails and it's not likely that's going to happen. Crypto-coins on the other hand have no such backing. The only value is in the trust of the people investing in it and this can fluctuate wildly:

    http://www.huffingtonpost.com/georges-ugeux/the-bitcoin-is-victim-of-_b_4676132.html
    Bitcoin is essentially an "open ledger" so the perspective that "you can lie to people" is strange. "Lie" in what sense? Bitcoins are designed to act like cash and to remove the central bank from the currency. It's doing exactly what it was designed to do.

    Lie in the sense that you can exchange something for bitcoins, take the bitcoins and don't follow through on what you are offering. You can't do chargebacks and you can't prove original ownership. Being able to trace transactions is good but there are ways round it using tumblers:

    http://www.newstatesman.com/future-proof/2013/12/theres-£60m-bitcoin-heist-going-down-right-now-and-you-can-watch-real-time
    http://www.theguardian.com/technology/2013/dec/09/recovering-stolen-bitcoin-sheep-marketplace-trading-digital-currency-money

    Computers are fast and people are slow. There's no way you'll be able to trace every transaction that happens. You can call the police if someone steals your fiat currency, they won't do anything if someone steals your bitcoins, mostly because they can't.
    Minarchism

    At some point in history, this will have existed. Laws and regulations are brought in over time as a response to the failure of those systems. The last couple of centuries have brought about a huge rise in life expectancy and overall quality of life and it's been regulated all the way. When the regulation didn't exist, there were poor working conditions, education, healthcare and so on. That's not to say the growth of a governing body is inevitable and should be promoted. It should only be enough to fix the problems it is there to solve. Taking away its governance over a problem reverts to the original problem left by the free market's inability to fix it on its own so it's not the solution. If government's involvement makes it worse, it's a better option to reduce it and in some cases this is true but I wouldn't say it's true in most cases.
Sign In or Register to comment.