Bitcoin, The Economic Singularity: From Holland with Love • Hacker News Board

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

#51

Post by vectorpush » Tue, Oct 29, 2013, 1:51 PM UTC

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…

Bitcoin is not a threat to centralized currencies, there is room in the financial world for both. A government controlled currency has some clear advantages, relative stability being one of them. I wouldn't accept paychecks in bitcoin for the same reason I wouldn't accept paychecks in gold bullion, although both have a demonstrable value, government issued currency provides a stable way for the average person to store wealth at scale. Although everyone sneers at the federal reserve, their financial engineering plays a real role in perpetuating western affluence (though it clearly has serious problems; a topic for another day).

The significance of bitcoin is that it's an unrestricted option for anyone at any time. Just because you won't accept your paychecks in bitcoin doesn't mean you won't want to use them from time to time, if only for the freedom to bypass the astonishingly ubiquitous banking institution. I'm not even talking about anything illegal (though illegal doesn't always mean wrong), I'm talking about the minefield of wealth draining fees and bullshit (frozen accounts, chargebacks, spending limits, really slow transfer times) that bitcoin lets you avoid when you want to.

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

#52

Post by snitko » Tue, Oct 29, 2013, 1:53 PM UTC

XorNot wrote: post #49

TomGullen wrote: post #37

Earlier quoted context omitted.

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.

And what is merit? Does Satoshi who created it have merit? Or do those who started mining it back then because they recognized the true potential have merit? Or those who bought it at $2 and then a $10 and then at $100 have merit, because they understand why Bitcoin is important and what it can do to the world? It's not like those who got in are random people. They had some knowledge and experience that allowed them to understand Bitcoin, while everyone else was running around screaming "ponzi scheme"

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

#53

Post by Weltan » Tue, Oct 29, 2013, 1:56 PM UTC

oleganza wrote: post #28

mattstreet wrote: post #24

Earlier quoted context omitted.

Require real money for things related to those services? Such as buying gasoline?

Some economists suggest a better measure: establish a coercive currency and print it as they like to pay for public goods. Just put a gun to people's face when they don't want fiat currency and then print all you want. Very practical solution.

What is a coercive currency and which economists suggest it?

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

#54

Post by oleganza » Tue, Oct 29, 2013, 1:56 PM UTC

maxerickson wrote: post #45

oleganza wrote: post #38

Earlier quoted context omitted.

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…

As a speculator the government is no better than any other speculator. It will compete on par (more cash is simply more risk). And big players trading bitcoin is a good reason for many more players to jump in this market. The governments are unique in their ability to apply guns. When guns are not used, it's no different from big investment firms playing on markets.

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

#55

Post by maxerickson » Tue, Oct 29, 2013, 1:57 PM UTC

shazow wrote: post #32

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…

"Tainted Bitcoins" can be trivially laundered and mixed in with normal Bitcoins. This will only become easier in the future, and conceivably make it into the protocol itself with something like ZeroCoin. It's funny but there is a lot of similar discussion on the other side of the fence, too: "Now that the FBI has a hold of DPR's Bitcoins, how do we blacklist these tainted Bitcoins so that we don't fall for honeypots/…

You are insisting on your own definition of tainted here. Your parent comment is using a definition where coins that pass through a mixer with tainted coins themselves become tainted. An aggressive party might do much the same thing with a service like Zerocoin (that is, once it watched a tainted coin go it, it would assume that only tainted coins can come out).

But anyway, the government accepting any bitcoins for tax payments should probably be considered a win for the ecosystem.

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

#56

Post by oleganza » Tue, Oct 29, 2013, 1:59 PM UTC

Weltan wrote: post #53

oleganza wrote: post #28

Earlier quoted context omitted.

Some economists suggest a better measure: establish a coercive currency and print it as they like to pay for public goods. Just put a gun to people's face when they don't want fiat currency and then print all you want. Very practical solution.

What is a coercive currency and which economists suggest it?

USD is "legal tender" which is direct coercion (you must accept USD as payment for a debt).

Indirect coercion is multitudes of currency controls, capital controls, taxation, banking licenses etc. All the laws and regulations backed by well-oiled guns of SWAT teams that prevent people from easily trading and saving in whatever currency they want.

Starting with Keynes and finishing with Krugman, Bernanke and Appelbaum who suggest forcing people to spend more by printing more money and increasing inflation. http://www.nytimes.com/2013/10/27/business/economy/in-fed-an...

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

#57

Post by pjc50 » Tue, Oct 29, 2013, 2:02 PM UTC

oleganza wrote: post #29

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.

Bitcoin owners become wealthy not by stealing, but because government is stealing from people via money printing and capital controls and regulations. Then, "wealthy bitcoiners" gladly share part of their investment and teach everyone about Bitcoin for free.

Bitcoin is highly stealable, in a world of vulnerable computers and non-reversible transactions.

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

#58

Post by shazow » Tue, Oct 29, 2013, 2:03 PM UTC

maxerickson wrote: post #55

shazow wrote: post #32

Earlier quoted context omitted.

"Tainted Bitcoins" can be trivially laundered and mixed in with normal Bitcoins. This will only become easier in the future, and conceivably make it into the protocol itself with something like ZeroCoin. It's funny but there is a lot of similar discussion on the other side of the fence, too: "Now that the FBI has a hold of DPR's Bitcoins, how do we blacklist these tainted Bitcoins so that we don't fall for honeypots/…

You are insisting on your own definition of tainted here. Your parent comment is using a definition where coins that pass through a mixer with tainted coins themselves become tainted. An aggressive party might do much the same thing with a service like Zerocoin (that is, once it watched a tainted coin go it, it would assume that only tainted coins can come out). But anyway, the government accepting any bitcoins for t…

> You are insisting on your own definition of tainted here.

How do you figure?

> Your parent comment is using a definition where coins that pass through a mixer with tainted coins themselves become tainted. [...]

1. The aggressive party would have to stop accepting any coins that come from Zerocoin altogether.

2. Mr. Taint can go about his day sending Satoshi's to random addresses in the blockchain, effectively tainting every address he can find.

3. It would require collaboration from every single Bitcoin service, otherwise a single non-collaborating service would end up mixing tainted coins with non-tainted coins over time and the whole population would become tainted.

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

#59

Post by oleganza » Tue, Oct 29, 2013, 2:04 PM UTC

pjc50 wrote: post #57

oleganza wrote: post #29

Earlier quoted context omitted.

Bitcoin owners become wealthy not by stealing, but because government is stealing from people via money printing and capital controls and regulations. Then, "wealthy bitcoiners" gladly share part of their investment and teach everyone about Bitcoin for free.

Bitcoin is highly steal able , in a world of vulnerable computers and non-reversible transactions.

Gold and USD is even easier to steal because it's damn too expensive or impossible to protect them. You never actually own USD, by the way, it's always in some banker's balance sheet. See also: http://en.wikipedia.org/wiki/Executive_Order_6102

Protecting Bitcoin by splitting the password via 7-of-12 SSSS and sending the keys to 12 of your friends around the globe costs almost zero. The amount of security does not depend on how much you are willing to spend on it. It only depends on your paranoia. Most of the people are safe enough with cheap offline computer. Fugitives can use more complex schemes.

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

#60

Post by pjc50 » Tue, Oct 29, 2013, 2:06 PM UTC

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…

I reccomend the work of Hernando de Soto on extralegality: http://www.amazon.com/Other-Path-Hernando-Soto/dp/0465016103...

In a country (Peru) where formal legal systems functioned extremely badly, there was a huge extralegal economy: houses, businesses, transport, etc all of which didn't officially exist and had no legal protection. Providing a route into the legitimate system provided a huge economic benefit for a lot of people and reduced Maoist terrorism.

Bad legal system < Lawlessness / Extralegality < Good legal system.