Why I’m Cryptophobic

Libertarian, if words are to mean things, is roughly the view that the initiation of force should be extremely strictly limited. This includes the idea of small government since government has a legal monopoly on the initiation of force, but it also includes an aversion to private initiation of force including everything from riots and gang violence to... scams.

Scams and fraud count because any understanding of what force means that is not paper-thin includes the idea that deception and even perhaps some "dark pattern" style attacks on human cognition constitute force. Force is anything that attempts to contravene the independent will of another human being. That can be done by whacking someone on the head, pointing a gun at them, or gaslighting and lying to them to the point that their judgement is deeply impaired. In standard issue "pure" libertarian theory the only justification for force is in response to its use, but since scams and fraud are force there is justification for someone (usually a minimal rights-protecting government) to intervene.

One of my central problems with crypto is that it's not what it claims to be at all. There are many ways crypto isn't what it claims to be including being a bad currency and a bad inflation hedge, but it's also not what it politically claims to be.

Crypto is neither "libertarian" (rights-respecting) nor truly decentralized.

It's not a rights-respecting libertarian thing because it's absolutely lousy with scams and fraud of virtually every imaginable kind. It's not truly decentralized because proof of work tends toward centralization due to industrial economies of scale and proof of stake tends toward centralization due to its structural biasing of the system toward intense levels of wealth concentration. With either PoW or PoS you eventually end up with closed syndicates more or less owning the currency. Then you have cryptocurrencies with actual companies behind them or de-facto rulers like Ethereum.

With those factors leading to centralization and with scams and fraud and all kinds of opaque intermediaries popping up what you end up with is something far less transparent and honest than a central bank. All the criticisms of central banking apply, but more so.

Gold is decentralized because it's just matter and anyone can hold it without asking anyone's permission. Honestly even paper money, while "fiat," is more decentralized in that exchange is completely permissionless.

So while there are valid criticisms of libertarianism, it's not the problem. It's much, much worse than that. Crypto as presently organized and operated is a full-on scam, period. It's not what it claims to be.

The libertarians and decentralization advocates are among the marks in this scam.

Bitcoins secondary value is appreciation, which depends on the primary value, plus a transient state where the public becomes aware of this new value at a pace that outstrips new BC generation.

Bitcoin's tertiary value is marketplace/exchange operation, which depends on both primary and secondary values.

But all of it rests on forbidden market access. The cost is considerable: a very high rate of consumption of both (dirty) energy and chip manufacturing capacity. There is also the cost of participation risk in totally unregulated markets, costs which have no upper bound.

So, fuck Bitcoin. Use cash.

That said, I think Adam (the original article) is closer to being right.

He doesn't even get into the thing that originally made me incredibly excited about the potential of blockchain tech—the way it lets one create a new sort of custom and irrevocable 'physics' for information and incentives. But the same irrevocability is now what makes me deeply concerned. If we get something wrong, it may be impossible to change, unlike normal human systems. It's like building Facebook, except the original design might be at least partially locked in functionally forever—and so issues created by naive founders can never be resolved and may warp our political and economic systems.

I have also generally found that crypto/blockchain/web3 doesn't address the problems its adherents say it can solve ( https://aviv.medium.com/the-magical-decentralization-fallacy... ), particularly changing power structures to get to a better world. Trying to find alternative solutions to address the power issues around centralized platforms is what eventually led me down a very different path ( to http://platformdemocracy.com/ ).