The Bitcoin Thread

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Clayton
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Re: The Bitcoin Thread

Post by Clayton » Thu May 03, 2018 1:18 am

Tom Rogers wrote:
Wed May 02, 2018 11:27 pm
Bitcoin seems like fiscal Gnosticism: the technological complexity makes it a little obscure, and I am wary of things that involve money but are difficult to understand. I think currencies should be simple and non-elitist, and I'm not sure Bitcoin truly is.
I am a proponent of Bitcoin but I encourage those who are not technologically inclined to stay away. Many Bitcoin proponents are suggesting that Bitcoin is going to replace gold as the "flight capital" but this is fraught on many levels. Anyone who distrusts the modern financial system should move their assets into things they understand and keep it out of paper. Even gold requires some research and education. For the non-technologically-inclined, gold is the superior choice.
I instinctively dislike the idea of electronic money anyway. It encourages an economic dependency on technology and the infrastructure of the worldwide web (including real estate and other aspects of the conventional money system), and it occurs to me that this might not be a very clever idea. It also has privacy implications, potentially. It also can't be separated politically-economically from 'the system' it is claimed to devolve.
This is both true and false at the same time. You are correct that cryptocurrency is complicated because it is married to the very system it is upending. But I don't think the goal of those who value liberty should be to upend the system for its own sake. Rather, the goal ought to be facilitating practical liberty for the bulk of the masses or, at least, facilitating the option for practical liberty. In my opinion, the system (the permanent Establishment) is a survival-oriented construct and it will automatically release its grip whenever continuing to squeeze becomes a threat to its own survival. In short, there is no need to actually destroy the system, only to bring the credible threat of its destruction. Think of it like a chess game. You don't actually need to check the opponent's King in order to force him to move it, you only need to move your piece into a position where you can check the opponent's King and he may have to move it in order to avoid unpleasant consequences from future moves. But there is no bluffing in chess - if your goal is to force your opponent to move his King, you must credibly threaten it. The system will morph in response to the game-theoretic reality on the ground.
I'm divided in my thoughts about the money system. On the one hand, fiat money and high interest lending looks like a scam. On the other hand, the very flaws in the system can also be its greatest strength: for instance, if a 'national-socialist' group were to take control of a Western government, they could turn the system on itself by simply fiating away the public debt and starting again. Indeed, that's exactly what the NSDAP did in Germany in the 1930s: they simply abolished the public debt legislatively and then established a new currency based on national productivity. A great deal of fuss is made about the creditworthiness of governments on the bond markets as a factor in the ability to invest, as if a poor history of repaying public bonds inhibits fiscal freedom-of-action, but I see no evidence of any such caution in reality.
Either I misunderstood this paragraph or you said the Nazis' economic measures - facilitated by nationalizing debt and massive inflation - were a good thing. I'll just ignore this paragraph under the principle of charity.

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Tom Rogers
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Re: The Bitcoin Thread

Post by Tom Rogers » Thu May 03, 2018 3:29 am

Clayton wrote:
Thu May 03, 2018 1:18 am
Either I misunderstood this paragraph or you said the Nazis' economic measures - facilitated by nationalizing debt and massive inflation - were a good thing. I'll just ignore this paragraph under the principle of charity.
I will be still more charitable to you and assume that your simple understanding of economics is not the result of laziness and ignorance.

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Tom Rogers
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Re: The Bitcoin Thread

Post by Tom Rogers » Thu May 03, 2018 1:44 pm

I apologise for my previous remark.

I don't want to get side-tracked in a discussion about the pros and cons of the Third Reich's economic policy, but my point was that I see nothing wrong with that sort of approach to economic policy - though that thought is predicated on a certain understanding of how fiat currencies work.

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Jon Irenicus
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Re: The Bitcoin Thread

Post by Jon Irenicus » Sun May 13, 2018 7:08 pm

Former overlord of the original Mises forum.

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Clayton
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Re: The Bitcoin Thread

Post by Clayton » Wed May 16, 2018 1:39 am


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Re: The Bitcoin Thread

Post by Tom Rogers » Fri May 18, 2018 7:01 pm

Clayton wrote:
Thu May 03, 2018 1:18 am
This is both true and false at the same time. You are correct that cryptocurrency is complicated because it is married to the very system it is upending. But I don't think the goal of those who value liberty should be to upend the system for its own sake. Rather, the goal ought to be facilitating practical liberty for the bulk of the masses or, at least, facilitating the option for practical liberty. In my opinion, the system (the permanent Establishment) is a survival-oriented construct and it will automatically release its grip whenever continuing to squeeze becomes a threat to its own survival. In short, there is no need to actually destroy the system, only to bring the credible threat of its destruction. Think of it like a chess game. You don't actually need to check the opponent's King in order to force him to move it, you only need to move your piece into a position where you can check the opponent's King and he may have to move it in order to avoid unpleasant consequences from future moves. But there is no bluffing in chess - if your goal is to force your opponent to move his King, you must credibly threaten it. The system will morph in response to the game-theoretic reality on the ground.
But isn't Bitcoin's whole raison d'être the radicalisation of money? I thought that was both its principal object and its practical utility, the whole idea being to use internet and web technologies to create alternative economic ecosystems, even a radical libertarian economy, based on a completely decentralised currency, with absolute privacy to go with it. Anyway, none of what you say changes the fact that Bitcoin is dependent on the conventional economic infrastructure. That being the case, 'the System' can (and surely, will) simply reverse the game-theoretic calculus and either threaten to pull the plug on Bitcoin or allow Bitcoin to morph in such a way that it is neutralised as a threat to non-virtual currencies. The best option is the latter, forcing Bitcoin to evolve in such a way that it loses its raison d'être and becomes just another form of electronic money that people use to make payments online with no privacy or other major distinguishing benefits, instead of an alternative currency with a guarantee of privacy. I have seen some evidence of this already. First, there's the fact that people are including Bitcoin payment buttons on their websites, in itself a self-defeating development. Also, I once consulted to a company that manufactured and placed ATM machines that, in effect, allowed people to exchange non-virtual money for Bitcoins and vice versa. You could argue that this type of practice makes it easier for people to use Bitcoins, but it seems to me that those ATMs exist for the opposite reason, that users need a convenient way to convert their Bitcoins into 'real' money.

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Clayton
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Re: The Bitcoin Thread

Post by Clayton » Sat May 19, 2018 4:22 am

Tom Rogers wrote:
Fri May 18, 2018 7:01 pm
But isn't Bitcoin's whole raison d'être the radicalisation of money? I thought that was both its principal object and its practical utility, the whole idea being to use internet and web technologies to create alternative economic ecosystems, even a radical libertarian economy, based on a completely decentralised currency, with absolute privacy to go with it.
I don't think that was Satoshi's vision, nor is it the vision espoused by any of the developers that I've read or heard talk. Doubtless, there are a lot of hardcore anarchists and cypherpunks that are embedded in the Bitcoin ecosystem. But there are also vice lords using Bitcoin. I don't think that the developers of Bitcoin have any special affinity to any of these kinds of users.

As far as "radicalization", it boils down to what you mean by radical. If "closing the central banks and putting an end to money-printing" is radical, then yes, Bitcoin is radical. Most of the financial establishment will label Bitcoin as radical for this reason. I see it (and the Bitcoin developers see it) as just plain common-sense. You can't just have some agency printing money out of thin air. It's loony on a level that makes the residents of a psych-ward look sane and sober.
'the System' can (and surely, will) simply reverse the game-theoretic calculus and either threaten to pull the plug on Bitcoin or allow Bitcoin to morph in such a way that it is neutralised as a threat to non-virtual currencies.
The permanent Establishment certainly believes that they can do this. But the reason they believe this is because they do not actually understand what Bitcoin is, just like they didn't understand the Internet. They eventually did succeed in taking over the browser platforms and the Web infrastructure (destroying most of the true potential of the Internet in the process) and they will doubtless deploy the same strategies against cryptocurrencies, and new ones besides. But the difference, this time around, is that when the Establishment loses, it's just not just a temporary setback, it's real dollars and cents going down the drain, it's real economic capital fleeing their banks and their coffers into a system that is entirely outside of their control. The fact is that Bitcoin is a razor-sharp dagger pointed directly at the beating heart of the Establishment, whether they have the emotional fortitude to accept that fact or not.
guarantee of privacy.
Bitcoin makes no guarantee of privacy. It's much more private than a standard bank account, so that's why people call it private. But it's not guaranteed to be private by any means.
people are including Bitcoin payment buttons on their websites, in itself a self-defeating development.
If you mean that the revenuers could track their incoming payments, this is true, but Bitcoin really isn't cypherpunk. It's not anti-cypherpunk, either, and I think that's the part that confuses most people. If you want to use Bitcoin to orchestrate your illegal whatever, you just might be able to pull it off. It offers many of the benefits of cash, plus the benefits of electronic money. The design of Bitcoin is such that these uses cannot be prevented. But neither is it the goal of Bitcoin to faciliate these kinds of transactions because they are, by their very nature, anti-social and erosive to the very social structures which Bitcoin utilizes and which it is truly meant to facilitate - business-as-such.
those ATMs exist for the opposite reason, that users need a convenient way to convert their Bitcoins into 'real' money.
Bitcoin is a long ways away from being actually mainstream. But it's going on 10 years old and with $140B market cap (as of this writing), it's hardly a flash in the pan. Obviously, an increase in the number of Bitcoin ATMs is a sign that Bitcoin use is growing, so that's actually a tally-mark in the column for a positive future for Bitcoin.



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