Fiat is Effective: fiat for the crypto crowd [pdf]

>suppose we were starting from scratch

"What-ifs" are always an interesting game but practically we're veeeery far from starting from scratch with the economy. But okay, I'll play.

>user signs transactions that authorize transfers with specific recipients and amounts

Great, but you've only secured one tiny part of the "earn money/spend money" loop. What if the service/goods you buy turns out to be a scam or something defective? What if my company stops paying me? What if the government starts unfairly taxing me and threatens to throw me in jail if I don't comply?

Our current economy is a lot more than just adding a value on one counter while decrementing an other. It's a complex web of laws, regulations and arbitrations that mean that I can buy something on Amazon without having to cross my fingers that I'll get what I paid for.

That's where this whole libertarian wet dream collapses for me. The whole argument behind bitcoin seems to be "what if your government turns into a fascist state, do you really want them to control your money?"

And clearly the answer is no, but if we end up in this situation my savings account might not be the first of my worries. Nor would having my money in bitcoins prevent me from being thrown in jail if I refuse to yield my secret keys to the neo-gestapo.

On the other hand if the government is benevolent and works for the good of the people then I really want it to be able to control the currency, be able to cease the money generated by illegal activities and tax legitimate income fairly in order to build roads, hospitals, schools, the police and firestations (amongst other things).

I don't want to live in a society where I can't trust my democratically elected government. So maybe we should work on fixing that rather than coming up with incomplete workarounds. "Hey, my sister got detained for thought crime yesterday, but at least I can send her Bitcoins to prison unhindered! Take that Ür-Hitler!"

Oh no, your attacker will point a Desert Eagle at your head and you will unlock all your wallets. After the money is transferred you won't be able to recover it.

The reason why currency in current form is so interesting is that it is not easy to move massive amounts currency into a form that can be easily consumed. Even uncut diamonds is a small market so in event crime happens the proceeds of crime will likely be recovered given determined tracking party (i.e. nation state) and returned to the victim of the crime. This, essentially, is the single most important part of the non-crypto currency UX.

I can provide you with an example another extremely popular ( much more popular than BitCon ) currency that does not have such UX - it is cocaine. I think we all can agree its main UX property is violence.

That's not the whole argument, by a long shot.

The dollar has lost %99.99 of its value, and in my opinion has had %100 inflation in the past 10 years (not each year but over the decade) so is effectively half as valuable again.

This is theft from the people. Even Keynes recognized this.

Bitcoin is an exit from that system. It has lot of other features like the ability to send money across borders which is harder to surveil and stuff like that.

I'm also tired of people rationalizing taxes by talking about things like roads which get almost no money-- taxes pay for dropping bombs on brown people. That's the vast majority of where the money goes.

If you're pro-tax, you're pro-murdering brown people. fullstop.

Main source of income is taxes, but it got close there -- in 2009 the federal deficit got up to 1.413 trillion, which made debt a larger source of income for the government than income taxes and corporate taxes combined. Even without emergency spending like that, the gradual deficit increases are going to mean that soon receipts will not be sufficient to cover interest on the debt.

My point about "coming to your door" was not bitcoins vs. dollars, but taxes vs. FOMC. If the government really wants to give away the value equivalent of trillions of dollars, they have to get the money from increasing receipts, rather than just monetizing debt. They can take on debt, but they have to pay for it, rather than use accounting tricks to borrow at zero interest to support zero interest "loans".

That said, you're probably right; no effective political action is going to be taken in opposition to tax levies, especially if they're aimed at the "1%" -- by the time the 1% becomes the 30% (vis a vis AMT) people will have forgotten why they cared.

These arguments against bitcoin have been the same since 2010. They seem to ignore the point of bitcoin (it is impossible to counterfeit, unlike fiat which is counterfeited as a matter of course by the central bank to pay the federal government so it can buy bombs).... and all the features of bitcoin which are increased privacy, better control over your funds, better security, etc.

At any rate, the past 7 years has shown the market accepting bitcoin and the price being driven up.

People don't want to accept this fact so they call it a bubble. It bubbles a bit, sure, and there will be a bitcoin bubble-- but we're not there yet.

Bitcoin is the internet of money. This isn't just a slogan. Bitcoin is a platform that provides many improvements to the existing system.

But as a technology platform it is going thru the technology adoption life cycle, so was more and more people hold some, the price goes up. It will be "volatile" until it's fully distributed.

So "speculating" is not bad-- it's how bitcoin gets its wide distribution. Over time as applications are built on top of the platform, the utility will come more into play.

This is ok. This is the early years. Bitcoin isn't meant to replace the entire system right out of the gate.