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Bitcoin, The Economic Singularity: From Holland with Love

bitcoinmagazine.com

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Re: Bitcoin, The Economic Singularity: From Holland with Love

#41

Post by icebraining »

zorked wrote: post #18
innino wrote: post #4

What is Bitcoin's deeper significance? I don't know much, but here are some sketches. 1) Bitcoin has the potential to destroy the tools of monetary policy. 2) Bitcoin has the potential to hide taxable income from governments. 3) Governments with dwindling tax bases may react by printing traditional currency, hastening the flight to Bitcoin in a vicious cycle. 4) Traditional currencies may collapse as people rush to c…

I don't understand why people think Bitcoin necessarily leads to governments collapsing. Bitcoin can be regulated in many ways: 1. If you buy a house you must show evidence that you earned the money. You can't earn all your Bitcoins Breaking-Bad (or Silk-Road) style and expect that the government will think your new-found fortune is ok. Thanks to the blockchain you kind of can't lie too much, unlike, say, cash. 2. If…

2. If the government wants to ban certain activities it can do so easily. Suppose that the government wants to keep its citizens from gambling or from using mixer services, it could declare that it won't recognize Bitcoins that passed through those services as legal tender. Good luck paying property taxes with your tainted bitcoins.

Bitcoins aren't actual "things", they're just values that get debited from an account and credited in another, so you can't have tainted bitcoins.

You could have tainted addresses, by checking if there's a path between a certain address and the blacklisted ones, but then anyone could taint anyone else's address by just sending them a Satoshi.

Re: Bitcoin, The Economic Singularity: From Holland with Love

#42

Post by oleganza »

throwaway9848 wrote: post #12
innino wrote: post #4

What is Bitcoin's deeper significance? I don't know much, but here are some sketches. 1) Bitcoin has the potential to destroy the tools of monetary policy. 2) Bitcoin has the potential to hide taxable income from governments. 3) Governments with dwindling tax bases may react by printing traditional currency, hastening the flight to Bitcoin in a vicious cycle. 4) Traditional currencies may collapse as people rush to c…

None of those is remotely in the realm of possibility, except maybe #2 and the difference in scale (at least in the US) between total tax receipts and the float of BC is so vast that it limits it to a very small percentage of the total. All bitcoin currently in circulation amount to 0.1% of one year of US tax revenue ($2.5T v $250M).

Two and a half years ago 1 BTC was 200 times less valuable - around $1. Give it two more years and it will be 10% of US tax revenue. Than everything will be possible.

Re: Bitcoin, The Economic Singularity: From Holland with Love

#43

Post by yk »

pjc50 wrote: post #27
zorked wrote: post #18

Earlier quoted context omitted.

I don't understand why people think Bitcoin necessarily leads to governments collapsing. Bitcoin can be regulated in many ways: 1. If you buy a house you must show evidence that you earned the money. You can't earn all your Bitcoins Breaking-Bad (or Silk-Road) style and expect that the government will think your new-found fortune is ok. Thanks to the blockchain you kind of can't lie too much, unlike, say, cash. 2. If…

Except that finite money supply in a growing economy with positive interest rates is both deflationary and a driver of increasing inequality. Sensible active monetary policy and "lender of last resort" activities are vital to functioning modern economies. That's why they had to be enacted in Europe during the financial crisis despite not being properly provided for by the existing Euro framework.

( I am rather trying the argument, rather than actually believing it myself.)

There are not only BTCs, but also forks and other crypto currencies. So if BTCs hording becomes a problem the incentive to adopt one of the alternatives will rise. Diminishing the value of BTC relative to some other currency and therefore suppressing ( at least to some extend) hording.

Re: Bitcoin, The Economic Singularity: From Holland with Love

#45

Post by maxerickson »

oleganza wrote: post #38
maxerickson wrote: post #31

Earlier quoted context omitted.

It can play games though. It can buy and hold to tighten the market and then dump coins to loosen it up. Given the current size of the market, a government budget of a few billion dollars can easily whipsaw the bitcoin supply.

That would be very expensive for government. First, it will basically give away a lot of money and invite 100 times more people and capital in the bitcoin economy. Then, after selling its stash it will affect the price much less (because it will also have been driven up by many additional speculators) and simply earn back much less USD than they have spent. Of course, it will destabilize prices for some period of tim…

You are saying you don't think government manipulation would have negative (long term) impacts. That's a separate thing from the government not being able to play games with the currency.

Part of the reason I said 'a few billion' is that several governments can afford to spend that, no problem. If they think they are facing an existential threat (as you seem to believe), it is basically a certainty that they will try it.

Re: Bitcoin, The Economic Singularity: From Holland with Love

#46

Post by maxerickson »

oleganza wrote: post #42
throwaway9848 wrote: post #12

Earlier quoted context omitted.

None of those is remotely in the realm of possibility, except maybe #2 and the difference in scale (at least in the US) between total tax receipts and the float of BC is so vast that it limits it to a very small percentage of the total. All bitcoin currently in circulation amount to 0.1% of one year of US tax revenue ($2.5T v $250M).

Two and a half years ago 1 BTC was 200 times less valuable - around $1. Give it two more years and it will be 10% of US tax revenue. Than everything will be possible.

Why not wait 10 years until it is 1000% of US tax revenues?

Re: Bitcoin, The Economic Singularity: From Holland with Love

#47

Post by oleganza »

yk wrote: post #43
pjc50 wrote: post #27

Earlier quoted context omitted.

Except that finite money supply in a growing economy with positive interest rates is both deflationary and a driver of increasing inequality. Sensible active monetary policy and "lender of last resort" activities are vital to functioning modern economies. That's why they had to be enacted in Europe during the financial crisis despite not being properly provided for by the existing Euro framework.

( I am rather trying the argument, rather than actually believing it myself.) There are not only BTCs, but also forks and other crypto currencies. So if BTCs hording becomes a problem the incentive to adopt one of the alternatives will rise. Diminishing the value of BTC relative to some other currency and therefore suppressing ( at least to some extend) hording.

Hoarding (saving) will never become a problem because the value of currency is derived from all savers willing to hold it. Why would I store money in an altcoin if Bitcoin has bigger number of savers and I project that it will only increase (and thus increasing my own wealth)?

People want one money - the most marketable most liquid commodity to store their cash in. http://blog.oleganza.com/post/54121516413/the-universe-wants...

Re: Bitcoin, The Economic Singularity: From Holland with Love

#48

Post by oleganza »

maxerickson wrote: post #46
oleganza wrote: post #42

Earlier quoted context omitted.

Two and a half years ago 1 BTC was 200 times less valuable - around $1. Give it two more years and it will be 10% of US tax revenue. Than everything will be possible.

Why not wait 10 years until it is 1000% of US tax revenues?

In ten years there won't be any meaningful US tax revenue.

Re: Bitcoin, The Economic Singularity: From Holland with Love

#49

Post by XorNot »

TomGullen wrote: post #37
pjc50 wrote: post #21

Earlier quoted context omitted.

Bitcoin seems to be a very good way of creating a new "club" of a small number of bitcoin-wealthy at the expense of everyone else. Being resistant to legal action is not an advantage, it will create an environment rife with fraud and security risks.

Being resistant to legal action is an advantage in many parts of the world with repressive government. There are more advantages when you look outside the narrow view of utility in modern western society. Now anyone in the world can explore entrepreneurship and all they need is a computer. Computers are becoming more and more accessible (Raspery Pi's, $100 laptops etc). Now people in poverty stricken countries can es…

> The difference being that Bitcoin is not a fundamentally rigged system.

A fundamentally rigged system is any system which doesn't reward merit. That's BitCoin - it doesn't reward merit. Those who got in first, benefit if they convince everyone else to use it.

But those they convince do not benefit the same.

Re: Bitcoin, The Economic Singularity: From Holland with Love

#50

Post by XorNot »

oleganza wrote: post #33
MarcusVorenus wrote: post #26

Earlier quoted context omitted.

The only thing that governments would need to do to stay in business is to tax things that can't be hidden, like land and real estate. I'm hoping they go with a single land value tax.

Then, governments cannot longer be "socialistic" by promising something for nothing. To do new awesome "government service" they'd have to raise taxes and then the lie will become obvious. Since no one really wants governments if they don't get free stuff, governments will quickly lose any moral support and will be viewed as plain thugs.

I presume you've packed your bags for Somalia in that case. The south still has no government to be found. I hear it's working out great there.
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