Central banking - great business to be in

Even when the bankers tell you what a scam the fiat money system is people still don’t get it:

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:rofl:

Funniest thing I have read in quite a while.

Especially when one considers that Bitcoin is purchased with “fiat” money.

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And ESPECIALLY when a large portion of existing bitcoin was “mined” into existance with stolen compute resources from across the globe, in private data centers and public clouds alike.

WTH

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@Egentis meet Hawkwin he is one of the believers.

My question is if Bitcoin is so great how come it is nearly impossible to use as money? The network is limited to about 7 transactions per second. That’s not fast enough for your local shopping mall. The designers clearly didn’t think very hard about this.

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Ordinals BTC NFTs were taking off. All the pent up buying power.

NFTs in general are taking off.

Eth NFTs past the Ordinals. Now I know why. Thanks for the word.

The BTC blockchain is getting set for a series of upgrades.

side note, My FB ads since Feb 6 have been served almost once to 12k people my audience. Now the showing of the ads begins its second showings to the entire group. It is going to get more interesting five weeks out. Eth is soaring. NFTs are gaining momentum. BTC is soaring. The bull will have more and more of a rush.

That could be true, but Bitcoin is still a really bad form of money. The technology is terrible. It is fine for inveterate gamblers but it is so poorly designed it can’t work as currency.

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It is not money. More of a barter system against digital scarcity. It changes the equation for some digital assets and some forms of digital exchange. The scarcity is different but as real as gold being scarce. It is arbitrary and also decidedly so. A human construct that many people reject but stands the test of time.

The problem is that the design is so bad it is nearly impossible to use for barter. It requires using expensive and uninsured third parties which collapse with alarming regularity.

For that reason virtually no one outside of drug dealers and human traffickers use Bitcoin for transactions. The vast majority of owners buy it to gamble on the price.

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If I buy $20k BTC it might cost me $200 in gas or 1%. Trade it and it might cost another 1% in gas to get the cash. A credit card charges more. People use credit cards all day long. Banks charge more for loans.

Right - but it doesn’t take 10 minutes to an hour (or more) for a credit card transaction to clear. It’s the transaction time, not the fees, that’s the first and biggest obstacle to BTC being used as a currency for transactions.

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Is that how long people in El Salvador are waiting?

If I made up XZY card and no one took it the wait times…

BTC is not trying to be a credit card. But in El Salvador, it might be at least a debit card.

I think I’ve already explained to you why this is a terrible analogy (it’s because the bitcoin holder pays BOTH fees, the credit card fee and the bitcoin fees). Here’s an easy way to understand it:

Person A: has a bank account with $25,000 in it. Wants to purchase something for $20,000. Uses credit card and pays 2.6% fee to do so.

Person B: has a bitcoin account with half a bitcoin in it. Want to purchase something for $20,000. Converts bitcoin to US$ and pays 1% fee. Waits a day or two for transaction to settle, then moves the US$ to a bank account. Uses credit card to purchase the item and pays 2.6%.

Sure but there is also straight from a bank account to the wallet that skips that fee.

Bank loans cost more.

There are better and worse ways. It is not like BTC does not fit into the mix.

If it was $100,000 BTC is a lot better.

That’s what I am talking about. In order to have any sort of functionality you must use a centralized third party on top of Bitcoin to patch the design flaws. Even then Bitcoin transactions in El Salvador started off as a very low percentage and are declining. Too expensive and too much hassle.

https://www.science.org/doi/10.1126/science.add2844

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Central banking isn’t a business. It’s a government function. If you mistake government functions for a business, you’re going to come to all sorts of non-sensical conclusions.

–Peter

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And to pile on a bit, central banking isn’t terribly lucrative for the top executives of the Federal Reserve Banks, either. They’re all government employees, so their salaries are known (within a range, at least).

The info I saw was a couple years out of date, so adding in a little guesstimate for inflation adjustments, Powell might be getting as much as $300K a year, plus benefits - notably retirement. The other members of the open market committee and the presidents of the various branch banks probably make a bit less.

I suspect the situation is similar in other modern, democratic countries.

I doubt there is a for profit bank whose President and CEO makes less than 10 times as much, and most are probably multiples higher than even that lowball figure.

So central banking isn’t a great business for the most senior executives of central banks, either.

Of course, I won’t ignore the fact that the former holders of these high public offices are likely commanding much higher incomes after leaving their positions, typically from speaking fees, book deals, and consulting contracts. So it may not be quite as bad as I’ve painted the situation. On the other hand, there is still a significant piece of delayed gratification here - something sorely lacking in private sector bank executives.

—Peter

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