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HE BITCOINED OFF MORE THAN HE COULD CHEW

I reserve the right to be wrong...



BitCoin grows apace, as Jeffrey Tucker reports, being accepted by ever more physical merchants in cities throughout, presumably, the USA.

Also, however, a Fed insider has supposedly spilled the beginnings of some beans on Fed modelling of the future of BitCoin as a currency. Grant you, this person seems to think that the Fed losing control of people's money is a bad thing, but then can you blame abused children who know nothing but that abuse when they are frightened by the prospect that it could all come to an end? What on Earth could possibly be next?

I guess the march toward BitCoin being accepted as a unit of account is finally underway. You'll know you're winning when the government starts accepting BitCoins and LiteCoins themselves as tax revenue. Even then, Leviathan is no shoe-in for the control of humanity's future. After all, as people more and more see the pointlessness, meanness and stupidity of government expropriation, the more they will seek ways to simply leave the state, bit by bit, without ever consulting so much as a pamphlet on Libertarianism.

The article in the link above shows fifty ways in which people are simply ignoring various government-run, or government-controlled services in favour of free-market rivals. Naturally BitCoin and LiteCoin share an entry on that list, and if the other services on there start accepting BitCoins... well, think Elysium, but for everybody, rather than some legally-defined elite.



Once again, I reserve the right to be wrong...

P.S - I'm posting the Reddit source in full below in case it disappears from Reddit in the near future

"""
Game Changer: Bitcoin research at the Federal Reserve and how I've lost my job
by real_federales

The Background: I'm a trained economist with a B.S. in Computer Science, a M.S. in Operations Research, and a PhD in Econometrics. I interned at the NY Fed during my degree, worked at a macro trading hedge fund, and now work at the major S.E. Fed branch doing econometrics and related modeling. I've had a long running interest in bitcoin and was one of the first people to publish a working paper on FPGA based bitcoin miners at a Georgia university focused on technology. I know bitcoin, technology, and economics on a theoretical and applied level. I'm not motivated by money (see my move from hedge fund to fed); I'm an applied academic with an incessant drive for research.
The Job: I function as a briefing researcher at the Federal Reserve. My primary research interests are the statistical modeling of developing currencies and the integration of those models into our massively parallel simulations for policy projections and forecasts. In layman's terms, I do the lower level mathematical/statistical research and then brief senior management (fed governors) at our regular meetings.
At the beginning of May, my team and I were assigned to an exploratory project. Typically summer is the off-season and most of the projects are time fillers that result in a few papers/presentations and are then archived and never heard of again. This project was different. We were given a direct research assignment from the Board of Governors a few hours after the conclusion of their May 29th closed meeting.
The Assignment: We and as far as I know several other research teams across the Fed system were tasked with creating a bitcoin report. I assigned my team to run the typical econometrics simulations and forecasts we do for developing currencies. Thinking this was summer doldrum busy work, we were diligent on calculations and modeling but definitely did not go out of our way to provide extra insight. At the end of June, I presented the report to my Fed governor and was met with strong disapproval and a sense of upmost urgency. Long story short, I almost lost my job for not taking this project as seriously as I should have and the Board of Governors renewed the projct and gave us explicit research directions along with weekly addendums.
The DirtyWe were directed to upgrade our modeling of bitcoin from developing currency to a major currency. In addition to all of the common modeling and forecasting that task entails, we were instructed to do full simulations of money flows, interest rates, multi currency derivative baskets, risk metrics, and their effects on global macro monetary policy and trade agreements. What we found was shocking. Even with a mediocre adoption rate and variable growth rate, bitcoin severly disrupts how we model, forecast, and ultimately understand currency interactions to make monetary policy decisions. This is a huge technological, monetary, and policy disruptionwhich leaves the Fed, the US govt, and other entities with much less control. Our best case scenarios are modeled upon current bitcoin adoption rates which have simulated a tipping point for the year 2026 (worst case 2021); this time frame projects the Fed (via the dollar) to lose its dominant global monetary policy maker status - instead everything will superceded by bitcoin.
I presented this updated report along with all of our modeling work and simulation outputs which were statistically and independently verified to the Board of Governors. The Board was highly alarmed and interrogated me and my fellow researchers in a 3 day session trying to understand every point of our research. It must be remembered that unlike politicians, the Board of Governors is a very well educated and empirical group with an ability to conceptually grasp complicated research.
The Outcome: Three weeks after the report, my research team was disbanded, I was moved to a tiny regional federal reserve branch and given virtually no research resources. Similar fates came to my team members and most of us are actively trying to pursue opportunities outside of the system. While the classified information nondisclosure agreements bind us in many ways, I personally will try to go back into the trading industry with a keen eye on bitcoin as my primary research interest.
It is clear to me that Bitcoin has fundamentally changed the spectrum of how we view and model economics. The central banks are afraid, the governments are afraid, and they would rather bury the truth by firing their own dedicated researchers and archiving the reports than embrace change and building a sustainable economic future.
If you have any questions feel free to AMA, I will try my best to answer.
"""

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... No.

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