
An Open Letter to U.S. Dollar Owners: Bitcoin Is a Threat to Your Savings - ClintEhrlich
https://www.krnc.io/post/an-open-letter-to-the-owners-of-u-s-dollars-bitcoin-is-a-threat-to-your-savings
======
uberman
Founder of block chain company tries to convince you that blockchain is
digital gold . That block chain scarcity better than the gold standard Likely
knowing full well that the value of promises backed by gold would still have
you know value. Promises backed by hashing have no value in the event that the
currency fails

~~~
ClintEhrlich
I'm actually trying to convince people that, if we accept the premise that
blockchain technology can create digital gold (as the market has, to the tune
of hundreds of billions of dollars) then we should harness that digital gold
to protect the value of the money that everyone already owns, rather than
setting the world on fire by launching new currencies that function like
pyramid schemes.

~~~
uberman
While noble, your digital gold is worse than usd not being fully backed by
gold though. There is no intrinsic value in a database of hashes in the event
that a currentcy fails. This solution is as much a fiat solution, if not more
so than usd. The gold standard was as much if not more about securing the
value of money as it was about controlling inflation as a result of over
printing.

~~~
ClintEhrlich
There's two nuances I would respectfully suggest that you're overlooking.

First, KRNC is designed to be employed as a _supplement_ to USD. Most
transactions would be executed with both USD and a corresponding blockchain
asset. Technically, this is a digital analogue of the "symetallic standard",
in which base money is comprised of both gold and silver in a specified ratio.
The point is risk diversification: if fiat money implodes, or if crypto fails,
you aren't wiped out.

Second, the concept of "intrinsic value" is misleading/confused when it comes
to money. Things that trade at their consumption/production value are not
monetized. Treating something as money involves attaching _symbolic_ value to
it: accepting it as proof of goods or services rendered in the past, and as a
token that can be used to acquire goods or services in the future. Even gold
would lose most of its value if it were suddenly priced based only on demand
for use in industrial applications.

Money has always been valuable because everyone else treats it as money,
whatever it is. It's a Schelling point that enables abstracted barter. Nothing
less, nothing more.

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tromp
> But it's also designed to work like a pyramid scheme. Most of the Bitcoin
> that will ever exist is already in the hands of a small group of early
> adopters.

What if Bitcoin were superseded by a cryptocurrency with a linear emission
(i.e. a constant block reward)? Would that no longer be a pyramid scheme?

> everyone who owns U.S. Dollars will become poorer.

You mean everyone who owns dollars but no bitcoin.

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jraedisch
What money is going to be fully reserved? Base money or credit money or both?
What happens to new credit money? How do you keep the blockchain based
currency from trading at a different value, e.g. me not believing in it
selling USDf for real USD? (All not answered in F.A.Q..)

~~~
ClintEhrlich
Thanks for the questions. I'll make sure to expand the FAQ when I get a
chance.

1\. The USD that you can use to unlock USDf (forked dollars/digital gold) is
limited to deposits at commercial banks and credit unions. The public does not
have access to electronic base money, so it's not included.

2\. The quantity of USDf you can unlock is based on your historic bank
balances, as verified during a defined window in the past. New credit money
created after that point in time doesn't affect those past balances. To the
extent that the owners of new USD wish to acquire weight for them, they'd need
to purchase USDf, increasing its value. That is sort of the whole point: if
governments keep inflating their money, the "forked" version with guaranteed
scarcity will gradually increase in value.

3\. USDf will trade at a different value than USD. At first, a much lower
value. The idea is for them to be employed in a hybrid unit of account, USDw,
where 1 USDw = 1 USD + 1 USDf.

A crypto-weighted dollar (i.e., USDw) will trade at a premium over a USD,
since it is a USD + cryptographic weight. Think of it like a stablecoin that
also comes with Bitcoin-like inflation protection. However, it's also possible
to use USDf as an independent asset, and that will be convenient in use cases
where transferring USD on existing payment rails isn't practical.

~~~
jraedisch
I would argue that smart savers at the moment are saving in cash in a safe.
They would not get any USDf, right? So USDf is for the less informed. Are you
expecting them to actively go through an unlocking process? Or will their
banks do it based on public demand somehow? How is demand going to happen
without people using it? Why would people use it if they don't have an
advantage?

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moocowtruck
I feel like bitcoin is a threat to ones savings instead..

~~~
ClintEhrlich
That is precisely the problem we're trying to solve: allowing the public to
take advantage of blockchain-based digital scarcity without anyone being
forced to invest in speculative assets.

