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Comment: Re:Yea, but HOW (Score 1) 704

by mrlibertarian (#46399719) Attached to: Bitcoin Exchange Flexcoin Wiped Out By Theft
You can protect bitcoins with multiple passwords. So, you could set up a system where the bitcoins in cold storage are only accessible if a certain number of owners and/or trusted employees are present. Now the bitcoins are invulnerable to hacking (because they're in cold storage), and they can't be stolen unless all of the trusted individuals decide to break the law together. With a system in place like that, only the small number of coins in the hot wallet are at risk.

Comment: Re:Regulation of currency (Score 1) 240

by mrlibertarian (#46387239) Attached to: MtGox Sets Up Call Center For Worried Bitcoiners

In a free market, there would be far more exchanges to choose from, and so it would have been much harder for a poorly-managed exchange like Mt. Gox to rise to the top. The reason that there is a scarcity of bitcoin exchanges to choose from is not due to too little regulation; it is due to too much. The anti-money laundering laws in the U.S., for example, scare most banks away from anything that is related to bitcoin, and that makes it very hard for law abiding citizens to start an exchange in the U.S. Why do you think that Coinsetter, a NYC-based forex trading platform, does not offer a way for U.S. citizens to deposit dollars? It is not because they are scared of competing; it is because they are scared of what the U.S. government will do to them.

That being said, even in a free market, there would be failures. No one really thought that Mt Gox would manage to lose all of the bitcoins in its cold storage. That's just breath-taking incompetence. But the flip side is, people have learned a lesson. Unlike the modern banking world, there are no moral hazards here, and that's a good thing.

How do we prevent a Mt. Gox style collapse in the future? By having auditors come in and making sure that companies are actually following security best practices. For example, storing bitcoins in cold storage (which makes hacking impossible), and protecting those bitcoins with multiple signatures (so that no one person inside the company can steal them). If the government would just give out of the way, this would happen naturally. But most people expect the government to act as the referee, so the government will probably mandate the regular auditing of exchanges. The government will take credit for making the bitcoin world safe, when in reality, the government was never needed, and, worse, they facilitated our current situation by making it tough for good actors to enter the market.

Comment: Re:Vive le Galt! (Score 2) 695

by mrlibertarian (#46335819) Attached to: Mt. Gox Gone? Apparent Theft Shakes Bitcoin World
Actually, there's talk of fixing this problem with more crypto-magic. gmaxwell, a core bitcoin developer, has proposed a way to let individual customers verify that exchanges really hold the Bitcoin funds they claim to hold on on behalf of their customers:

Comment: Re:A little misleading (Score 2) 430

by mrlibertarian (#46119909) Attached to: Kansas To Nix Expansion of Google Fiber and Municipal Broadband

So what do you do when you are in an area that isn't going to be high profit and already has an incumbent with no interest in providing good and reasonably priced service?

Perhaps a potential competitor could ask residents to help fund the initial cost of building the infrastructure. Perhaps the company could promise that every resident who offers a certain amount of start-up capital will receive free service for some period of time upon completion of the infrastructure. Or perhaps the competitor could offer stock to the residents, so that the residents could make their money back over time if the company is successful. Either way, the municipal should stay out of the negotiations.

Of course, if a company makes residents an offer, and the residents decline, that simply proves that the residents are not willing to put their money where their mouth is. Sure, it costs more to serve rural areas where the residents are more spaced out, but that makes perfect sense; it costs more because it takes more resources. If the residents want the municipal to step in, then what they are really saying is, "We want someone else to pay."

As an analogy, if I live in the desert, then I'm going to pay more for air conditioning. I don't expect the government to come in and help me because my air conditioning costs are higher than the rest of the country. Why should it be any different when it comes to deploying fiber in urban vs rural areas?

Comment: Re:This is the problem with religious people. (Score 1) 903

by mrlibertarian (#45839701) Attached to: US Justice Blocks Implementation of ACA Contraceptive Mandate

Yes, single payer would fix some problems, but it would also create a lot of new ones. The problem with a single payer system is that if the government pays, then the government sets the price. Therefore, advocating single payer is the same as advocating that every health care service be price controlled. The problem with price controls is always the same: if the price is too high, we will have a surplus, and if the price is too low, we will have a shortage.

The government, in order to keep taxation levels from skyrocketing, will probably set the prices too low and create shortages. These shortages are likely to be exacerbated by the inevitable increased demand that comes when people no longer have to spend their own money. People will have every reason to consume as much healthcare as they can get their hands on, and they will have no financial reason to moderate risky and unhealthy behaviors, such as smoking and overeating. In summary, we can expect many shortages (i.e. rationing, wait lists, etc.) in a single payer system.

Comment: Re:This is the problem with religious people. (Score 5, Insightful) 903

by mrlibertarian (#45837977) Attached to: US Justice Blocks Implementation of ACA Contraceptive Mandate
The fundamental problem here is that the government has coupled health care and employers together. For some strange reason, the ACA did not fix this problem. We need to decouple health care and employers by eliminating the tax break that employers get. If we do that, then we'll no longer care what health care plan our employer offers, just as we don't care what car insurance plan our employer offers.

Comment: Re:Sure, to *differently skilled* jobs (Score 1) 674

by mrlibertarian (#45035643) Attached to: The Luddites Are Almost Always Wrong: Why Tech Doesn't Kill Jobs

If I started at $40,000/yr 30 years ago and make $75,000/yr today and suddenly lose that because my entire industry has been obsoleted....

How often are these things "sudden"? The process of automation is not developed and deployed overnight. It is up to you, as a worker in an industry, to stay informed of the threats to your job security by new technological advancements. As the possibility of automation gets closer to reality, you should be preparing for your next job while you still have a stable income, as opposed to sticking your head in the sand and hoping the world doesn't change around you.

Comment: Re:Lemme get this straight (Score 1) 186

Treasuries and Reserves are both government debt instruments. The only difference between them is the interest rate, because in general Treasuries are highly liquid.

It sounds like we have a very basic disagreement here on the definition of words. I mean, I don't understand why you would say that Reserves (with a capital R?) are a debt instrument. Reserves are not a debt instrument. They are money, ready to be loaned out at any time. And if money is not "highly liquid", then I don't know what is.

Also, this entire thread started because you claimed that the Fed doesn't "print money", and I still don't understand how you can say that. If I go to a printing press and print money, then I have "printed money". And if I do the same thing electronically, then I have still "printed money". If I spend that money to buy assets, you can call my transaction an "asset swap", but clearly my "asset swap" was preceded by "money printing".

Call it whatever you want, but it remains a simple fact there is no mechanism in our system for these reserves to enter the economy.

What? We do have such a mechanism. Reserves enter the economy whenever banks loan out those reserves. After all, the word "reserve" means "Something kept back or saved for future use or a special purpose." If a reserve can never be used as a loan in the future or in the case of an emergency, then in what sense is it a "reserve"?

Reserves do not constrain bank lending and adding reserves does not increase bank lending.

Reserves do not constrain bank lending, but lack of reserves do in a system with minimum reserve requirements. Adding reserves does not necessarily increase bank lending, but adding reserves immediately increases the potential amount of lending.

Comment: Re:Lemme get this straight (Score 1) 186

The money multiplier crashed during the recent economic crisis.

Yes, because of the Fed. The Fed inflated the monetary base like crazy, and then paid interest to the banks to hold on to those excess reserves. Because of that, excess reserves went from 2 billion in 2008 to 1.8 trillion now.

So, what happens when interest rates start to rise and the economy starts to improve? Suddenly, the Fed's 0.25 interest rate is not going to be enough to keep the banks from loaning out all of those excess reserves. And that's when the inflation crisis is really going to take off. Check out this article if you want to know more.

Comment: Re:Lemme get this straight (Score 1) 186

The Fed isn't "printing money," they are conducting asset swaps in which the private sector exchanges one government debt instrument for another with a lower interest rate.

Are you talking about Operation Twist? That began in September, 2011 and ended in December, 2012, and that was always in addition to QE. QE, or quantitative easing, is when the Fed buys fixed-income securities on the open market. So, you are correct that the Fed is swapping assets, if you mean they are swapping "newly printed money" in exchange for "mortgage-backed securities/U.S. Treasuries".

Anyway, have you seen what has been happening to the monetary base since 2008? If that is not "rapidly printing money", then what is?

Prior to the financial crisis, private credit expansion (facilitated but not initiated by Greenspan) led to inflation.

Greenspan caused interest rates to fall by printing money. Low interest rate, in a system rife with government-created moral hazard (FDIC, Freddie Mac, Fannie Mae, etc.), is a recipe for disaster. The Fed is really less of a firefighter and more of a pyromaniac.

Of course, all of this money printing hasn't led to a big spike in consumer prices, nor has it been able to push the unemployment rate below 7% for almost 5 years now. But, we'll have to see what happens when the Fed starts tapering. My guess is that the economy will start tanking, and then it will be time for QE4. And, much like a drug addict, we'll need a larger dose if we want to stay high. How many doses do we need before stagflation begins? I'm not sure, but I know we'll find out.

Comment: Re:Whole Trial is bullshit (Score 3, Interesting) 325

by mrlibertarian (#44184137) Attached to: Skype Overload Interrupts Zimmerman Trial
Zimmerman's claim is that he got out of the car and walked in the same direction to see the name of the street to phone it in. If true, that would explain why he didn't argue with the operator.

So, unless he is lying, he didn't "chase down" Martin. I suppose you could argue that Martin felt threatened when Zimmerman reached into his pocket to get his cellphone. But that argument only makes sense if you start with the assumption that any civilian who shoots an unarmed teenager must be in the wrong and you reason backwards from there.

Comment: Re:Automation and Unemployment (Score 1) 602

by mrlibertarian (#42233767) Attached to: A US Apple Factory May Be Robot City

Eventually automation puts the starting rung out of reach of the average person and you are left with a mass of people unable to find employment anywhere in the economy, and limited in their intellectual capacity to be trained to ever get one of the scarce jobs that do exist.

If a robot takes care of all of your needs, why do you need a job in the first place?

You might reply, "But I don't have a robot." Okay, so go to to one of the employable people (scientists, artists, etc.) and say, "I notice that you happen to have an army of robots. Could you do me a small favor, and have one of your robots build me a robot? I will then take that robot and have it build robots for all of my friends, and anyone else who wants one. You can raise us all out of poverty, and you won't even have to a lift a single finger!" Given the large number of people who will have robots, I'm sure you will be able to find at least one person willing to do such a small, trivial favor for you.

In a world of robots, only a small fraction of wealth is needed to meet the needs of the unemployable. There is no need for socialism.

...some sort of peaceful wealth redistribution system...

There is no such thing as peaceful taxation.

Comment: Re:Will will happen has been seen already (Score 1) 608

by mrlibertarian (#41231161) Attached to: Obama and Romney Respond To Questionnaire

It was never illegal to start a new ISP.

The government owns the roads, which means it controls who can dig up the roads in order to run cable. Local governments use their road monopoly to stifle ISP competition. Local governments justify this stifling by using your "natural monopoly" theory. In other words, the natural monopoly theory is a self-fulfilling prophecy.

After all, it doesn't make sense to have multiple companies each running cable to your house so you can choose your favourite.

You control your property. You should decide what makes sense and what doesn't. Perhaps if we never had "right-of-way" laws (which usurp individual property rights), people would insist on owning the cable running through their properties. And even if people were content to allow cable companies to own the actual cable, cable companies would still be more inclined to be more competitive in such a scenario, because of the constant threat that individual property owners could choose to run a second line at any time (Oh no, two cables in the ground! The horror! Who would have thought that competition involved duplication?)

There is nothing natural about the way our infrastructure has evolved.

Comment: Re:Someone explain to me... (Score 1) 443

by mrlibertarian (#40914291) Attached to: This Is What Wall Street's Terrifying Robot Invasion Looks Like

Someone explain to me why high speed trading is a good idea for anyone?

First off, it doesn't hurt anyone to be able to trade quickly. I'm not saying it is necessary, but it doesn't hurt anything. Think of the stock market like an auction. At an auction, does it matter if someone is able to bid quickly? No. Let them make their bid as quickly as they want. You can respond by making an even higher bid.

That being said, the current latency war is indeed unnecessary. It is caused by SEC Rule 612, also known as the Sub-Penny Rule. This rule prevents market makers from competing on price, so they are forced to compete on speed. For more information, see Part 1 and Part 2 of "A High Frequency Trader's Apology".

Time is an illusion perpetrated by the manufacturers of space.