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The blockchain paradox: Why DLTs may do little to transform the economy

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Re: The blockchain paradox: Why DLTs may do little to transform the economy

#71

Post by KirinDave »

leitasat wrote: post #35

Well, there are some improvements over existing systems (e.g. fiat money): 1. Less costs to switch to a competitor comparing to banks and states which leads to 2. The governance body and all influential members are really in need of public approval of their actions since that is exactly what makes a coin worthy. If they change protocol in a drastic way, the price will immediately plummet leaving them in tatters 3. Sa…

If we're talking about "mass" adoption, which suggests consumer-level adoption?

Point #1 is exactly not what you want. It means your currency can lose value almost instantly. Fiat currencies can do this, but only rarely actually do.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#72

Post by arethuza »

ceejayoz wrote: post #63
arethuza wrote: post #61

Earlier quoted context omitted.

Except for the Eurozone where the ECB doesn't appear to really act as an arm of anyone's government.

Brexit demonstrates an available route to expressing disapproval of the ECB's actions.

The UK wasn't in the Eurozone - and I've been reading Yanis Varoufakis's books about his time as the finance minister of Greece and I've been fairly shocked at how fundamentally undemocratic (not to say unreasonable) a lot of EU institutions and the likes of the IMF are.

And I say that as someone who voted Remain in the Brexit referendum (note that Varoufakis actually campaigned on the Remain side in the UK).

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#73

Post by devrandomguy »

dragonwriter wrote: post #41
chii wrote: post #37

Earlier quoted context omitted.

> users of bitcoin (and other cryptocurrencies) have effectively no say in the design of the system they have to trust. how is that any different to the existing currency system like credit cards and banking? And users _do_ have a say in bitcoins. Namely, they can vote with their wallet (literally and figuratively).

> how is that any different to the existing currency system Fiat currency is governed by central banks, which are arms of government, and are accountable to the public in the same way as the issuing government. Obviously, the degree of accountability varies from government to government.

That is a pretty loose definition of accountability. If your bank screws around, are you going fix it by voting for a different candidate in the next election? I would say that my ability to purchase and run mining hardware, at a loss if necessary, gives me more control over my altcoins than my citizenship gives me over my bank.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#74

Post by libertine »

jasode wrote: post #7

I agree with Vili Lehdonvirta's analysis about governance and wrote a similar conclusion previously.[1] Yes, the concept of "money" existed before governments and therefore doesn't require government. That said, today's modern money is very much an instrument of government power. This is why alt-coins will not overthrow fiat currencies like some enthusiasts believe because Bitcoin does not come with its own Bitcoin-p…

But isn't that power just shifted to an elite who controls the great majority of the currency, and has the power to withdraw/dump coins (basicaly influencing the supply side of the market, and control the value)?

I'm pretty sure there are people/organizations who invested into such positions.

Isn't that a sort of control that may be worst then government power?

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#75

Post by simias »

KirinDave wrote: post #68
wildbunny wrote: post #59

Earlier quoted context omitted.

If miners chose to mine on a chain that no-one wants, then everybody has to grudgingly go along with it, or cease to transact. The longest chain is always the most valuable.

You're also referring to a major weakness in the distributed consensus of bitcoin: the longest-chain-preferred mechanism is almost certainly a vector of attack on the chain.

Wouldn't you need to have a majority of the hash power to fork the chain and generate a longer one anyway? I think it's well understood that anybody managing to go above 50% of the hash capacity effectively "rules" the currency.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#76

Post by ctlaltdefeat »

wildbunny wrote: post #18

He misses the point that the developers do not control bitcoin; the miners control bitcoin. The developers suggest improvements which will only be adopted if the miners support those improvements. The miner's interests are purely profit based, so they will not adopt changes which reduce their chance of profit.

>in particular, so-called mining pools, headed by a handful of individuals, are very influential.

He mentioned that.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#77

Post by mercutio2 »

jasode wrote: post #10
rlpb wrote: post #9

Earlier quoted context omitted.

> Bitcoin does not come with its own Bitcoin-police-force and Bitcoin-law-courts My government will enforce a contract even if it is denominated in some foreign currency, will it not? Currency used is independent of jurisdiction. They may award damages in legal tender, rather than in Bitcoin, but I have to pay taxes in legal tender anyway, so there will always be a market to convert back. Right now they might be conf…

>My government will enforce a contract even if it is denominated in some foreign currency, will it not? Sure, if usage of that other currency is trivial enough volume that it doesn't threaten the government's currency. That's the sticking point. Bitcoin is allowed to exist at the whim of the government.

Since deflationary Bitcoin in no way, shape, or form threatens central bank currency systems, I don’t think existing at the sufferance of central governments is anywhere on the roadmap of problems crypto currencies have.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#78

Post by ceejayoz »

arethuza wrote: post #72
ceejayoz wrote: post #63

Earlier quoted context omitted.

Brexit demonstrates an available route to expressing disapproval of the ECB's actions.

The UK wasn't in the Eurozone - and I've been reading Yanis Varoufakis's books about his time as the finance minister of Greece and I've been fairly shocked at how fundamentally undemocratic (not to say unreasonable) a lot of EU institutions and the likes of the IMF are. And I say that as someone who voted Remain in the Brexit referendum (note that Varoufakis actually campaigned on the Remain side in the UK).

The Eurozone nations have EU exits available to them, too.

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#79

Post by PKop »

altcognito wrote: post #40
blfr wrote: post #26

Earlier quoted context omitted.

If bitcoin achieved (a big if) wide adoption, it would be like keeping all your money in an index fund whenever you're not actively spending it. Its value would follow the growing economy.

Except deflation instead of inflation. Instead of sticky wages you'll be pressured to drop your hourly rates. Borrowing money would increase the cost of the loan, depending on the rate of value increase, you're looking at negative interest rates. Everything about deflation makes zero sense.

You've identified who suffers and who benefits from the reversing of value positions caused by deflation vs inflation.

But you haven't explained why its "worse"? So borrowers are disadvantaged compared to lenders (savers).

And wage earners are in a better position relative to wage payers.. ? That's what I take away from your statement.

But, one's ability to buy things seems to be improved...

Should we want an inflationary economy more college-tuition, healthcare-cost-like... or computing & software-like? Continually falling prices for all things computing related have done wonders for that industry no?

Would consumers be better or worse off having to spend less on food clothing housing energy? Would they have more or less disposable income with flat or falling prices?

Ok now assume increases in those costs... better or worse off? More or less disposable income?

Re: The blockchain paradox: Why DLTs may do little to transform the economy

#80

Post by dragonwriter »

arethuza wrote: post #61
dragonwriter wrote: post #41

Earlier quoted context omitted.

> how is that any different to the existing currency system Fiat currency is governed by central banks, which are arms of government, and are accountable to the public in the same way as the issuing government. Obviously, the degree of accountability varies from government to government.

Except for the Eurozone where the ECB doesn't appear to really act as an arm of anyone's government.

ECB is an arm of the EU (a government, but not a nation-state) accountable, as I understand it, through the European Parliament primarily and secondarily through the Council; and it is also accountable to the people of Eurozone countries through the accountability processes of their individual central banks, since the national central bank chiefs are governors of the ECB.
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