Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (15359)	1/2/2002 6:04:57 PM
From: Maurice Winn	Read Replies (2) \| Respond to of 281500

Hawk, you are looking backwards, not forwards. We need to look at what can be, not at the foolish ideas people have had. Yep, it sure was bad when Flooz and other faulty attempts to create money in cyberspace crashed. But it wasn't surprising. <However, a report in Monday's New York Times said the company was unknowingly victim to credit card fraud from thieves in Russia and the Philippines. The newspaper quoted unnamed sources as saying the New York-based Flooz had unknowingly sold $300,000 of its "flooz" currency over the last three months to a ring of credit card thieves in Russia and the Philippines, before being alerted by the Federal Bureau of Investigations (FBI). It said stolen credit card numbers were used to buy the online currency at the Web marketplace and used to purchase goods at online stores that accept the "flooz" money. > Credit cards can be brought on-line and made easily accessible and that's really good and logical. But not enough. Credit cards have inherent problems. A credit rating is needed [not everyone can get one, but they have money]. Bad debts happen. Fraud happens. Cost of credit is charged - people who pay off the account cost the company money which is covered in the charge to the dealer. The big one is that it is ordinary old fiat money. Taking a look at risk premium, a person holding US$100 and earning 3% interest has to get interest payments for 33 years before they have got their money back. But wait, they have to pay taxes on their interest! So they have to earn for about 50 years to get their money back. Sure, they can invest the interest payments and that brings the 'got my money back' date forwards, but interest covers the risk that the money will never be spent due to dying or something. Then, there is the ever-continuing dilution by further money-printing leading to inflation and loss of purchasing power. So, somebody has to wait a very long time to get their money back. In the meantime, the world isn't standing still. The USA might be the biggest and toughest gorilla in the jungle at the moment. But there is always the handsome, young, energetic and smart gorilla making a challenge for supremacy. There is also the risk of a collapse of the US$ as the tsunamis of US$ sloshing around look for a safe place to sit and some return to earn. If US$ holders decide that the US$ is not actually the safest place on the planet, there can be quite sudden panics [see Argentina and any number of other currency stampedes which have happened]. The point having cybermoney is not that it's exciting that it's cyber, but that transaction costs can go to near zero, speed of transactions are near instant, no credit costs are incurred, no fraud is possible [if identification by voice, iris, or other good mechanism is used], money is secure, and the currency would represent a real value = the productive capacity of humans. 50 years is a long time to wait to get your money back on the 'full credit and faith' of Uncle Green$pan and a bunch of politicians who live at the whim of an electorate. They can't promise what future politicians and money managers might do. Certainly not for 50 years! Meanwhile, I'll go on investing in creating the Q, just in case you decide in a decade or two that you would like to use a better money method. Mqurice