[ExI] lotta splainin to do

Tue Nov 15 22:08:18 UTC 2022

From: extropy-chat <extropy-chat-bounces at lists.extropy.org> On Behalf Of Stathis Papaioannou via extropy-chat
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>>…So as I understand it…The parallel coexistence of digital currency and fiat currency establishes the need for companies that allow swapping them?  Then these companies introduce inherent risk of fraud?  If so, are we not back where we were 20 years ago when that weak link was identified on an ExI sub-group? spike

>…Many crypto enthusiasts say that you should only self-custody your coins, the equivalent of hiding them under your bed, leaving them on exchanges only for the time it takes to buy them, which might be minutes. But then you have the risk of losing your self-custodied coins: you lose your keys, you get robbed, your friend defrauds you, and so on.

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Stathis Papaioannou

Stathis, the reason I introduced that business about California tax structure is to demonstrate why we will always have fiat currency with us, even if digital currency is used for most transactions (which I suspect it will eventually.)

The California state government decided on a property tax structure in the 1970s, then encoded that into the state constitution, along with all the traditional safeguards which makes any change to any state constitution inherently difficult.

When Governor… can’t recall the name… let’s call him Mr. Linda Ronstadt, pushed for the property tax structure, the two mainstream parties where opposite to what they are now.  Governor Ronstadt’s party was limited government, the other one was big government.  But, over time, those two changed positions.  At the time, a few in Governor Ronstadt’s party warned that if all this in encoded in the state constitution, it will become difficult or impossible to change.  Governor Ronstadt agreed and added still more difficulties to any attempt to undo his signature legislation.

Gov. Ronstadt was out of office for nearly 30 years, then was returned to that office.  By that time, his party clamored for overturning Prop 13, but the governor warned that it would be difficult or impossible to get that level of support for a measure that increases taxes on most of the voters and all of the ones who give money to the party.  So… eventually they dropped it.

Many sales pitches for digital currency carried the warning that the value of fiat currency in the US would drop dramatically, since the US government would be printing the stuff in arbitrary quantities.  But Californians knew that fiat US dollars would always pay the tax bill, regardless of what alternatives exist.  The California tax bill can only demand US dollars, in a known amount.  So if US dollars inflate to dimes, my property tax bill just dropped to a tenth, and that property tax bill is one of my biggest expenses.

Conclusion: US fiat dollars will retain some value for the foreseeable.

spike

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