Bitcoin and positive vs. normative economics • Hacker News Board

Re: Bitcoin and positive vs. normative economics

#111

Post by twoodfin » Sat, Dec 28, 2013, 8:48 PM UTC

seiji wrote: post #80

rch wrote: post #73

Earlier quoted context omitted.

So why don't they just invoice me in April? I shouldn't have to be bothered with tracking things on my end as well, right?

Lobbying by the tax accountant and tax software industry: http://www.propublica.org/article/how-the-maker-of-turbotax-...

To be fair, there's also a strong contingent within the U.S. political right that believes paying taxes should be made as explicit (and, potentially, annoying) as possible, lest the citizenry fail to appreciate how much of their income is being extracted to fund the government. This kind of thinking has popped up on the left from time to time as well, around things like military spending.

Re: Bitcoin and positive vs. normative economics

#112

Post by dimitar » Sat, Dec 28, 2013, 8:48 PM UTC

smtddr wrote: post #9

>>BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions. So basically it brings an ability to the middle-class that normally only the top 1% have. We know wealthy people use tax loopholes(and a few of them, laundering) and... why do…

I have had and am continuing to have a dialogue with smart technologists who are very high on BitCoin — but when I try to get them to explain to me why BitCoin is a reliable store of value, they always seem to come back with explanations about how it’s a terrific medium of exchange.

My friend, you fall under this critique. While the middle-class can make transactions if it chooses using Bitcoin, it has to deal with its huge volatility - a 'store of value' problem. You cannot have just a 'medium of exchange', like the song "You can't have one, without the other".

Re: Bitcoin and positive vs. normative economics

#113

Post by shawnz » Sat, Dec 28, 2013, 8:51 PM UTC

seiji wrote: post #47

hendzen wrote: post #35

Earlier quoted context omitted.

Actually, for your first point, you have to compare the carbon footprint of bitcoin to the carbon footprint of the alternative. What is the carbon footprint of all the different transaction processing systems run by Mastercard, Visa, Amex, etc? What about if you add in the cost of the massive mainframes that handle ACH transfers? The cost of printing millions of archaic paper checks? I'm not saying bitcoin replaces a…

The other systems aren't based around grinding CPUs at 100% power utilization for days/weeks/months doing worthless busy work. Unless your power comes from a zero-carbon-footprint renewable resource, it's pretty ugly.

It cant be "worthless" and simultaneously have the whole system based around it. If you want to use bitcoin and the "worthless" work is what allows bitcoin to exist, then it has worth.

Re: Bitcoin and positive vs. normative economics

#114

Post by semiel » Sat, Dec 28, 2013, 8:52 PM UTC

Who changed the title from the original's "Bitcoin is evil"? I thought Hacker News was opposed to editorial titles.

Re: Bitcoin and positive vs. normative economics

#115

Post by HarryHirsch » Sat, Dec 28, 2013, 8:52 PM UTC

cynicalkane wrote: post #62

smtddr wrote: post #9

>>BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions. So basically it brings an ability to the middle-class that normally only the top 1% have. We know wealthy people use tax loopholes(and a few of them, laundering) and... why do…

The rich are not exempt from tax monitoring and transaction monitoring. Actually, a lot of monitoring targets exclusively large accounts and transactions.

As far as tax monitoring goes, I'm not sure that account and transaction monitoring is helpful. If you have a stated income near the median, yet own a palace, a Porsche and a Lamborghini for the wife, a yacht &c something just has to be off. Apparently you can see the phenomenon in at work in Greece. If you have undeclared income, at some point the funds have to enter the regular economy, and from then on it's just old-fashioned police work.

Just how you do the actual enforcement, that's a different issue, especially if corruption is entrenched already.

Re: Bitcoin and positive vs. normative economics

#116

Post by greyman » Sat, Dec 28, 2013, 8:54 PM UTC

etjossem wrote: post #67

It's great that Krugman is trying to to make a purely positive analysis of the potential impacts of Bitcoin. He's entirely correct in saying Bitcoin has zero inherent value, as opposed to gold and USD. But that's missing the point. Most of us don't think about owning gold in terms of how readily we can make pretty things out of it, or dollars in terms of how easily we can pay our taxes. We hold onto them because both…

> He's entirely correct in saying Bitcoin has zero inherent value, as opposed to gold and USD.

No, no, he is NOT correct on that. Bitcoin's inherent value is in the Bitcoin technology. Inherent value of USD is that government declared it has value (by fiat). You can actually create "pretty things" with bitcoin technology, the same way you can create pretty things with gold - those are just other things.

Re: Bitcoin and positive vs. normative economics

#117

Post by steveklabnik » Sat, Dec 28, 2013, 8:54 PM UTC

guscost wrote: post #108

Bitcoins can only be as evil as cars, guns, LEDs, pin-and-tumbler locks, trusted computers, square-rigged ships, Jacquard looms, and enriched uranium. The point is that these are technologies, not people .

There's an assumption here which may or may not be true: technologies are ethically neutral.

Some reasonable people disagree with this assumption.

Re: Bitcoin and positive vs. normative economics

#118

Post by ubernostrum » Sat, Dec 28, 2013, 8:55 PM UTC

pdonis wrote: post #57

ashray wrote: post #18

This title of this post does a disservice to its contents. "Bitcoin is evil' makes it sound like it's a propaganda piece. I went in expecting some of the usual poorly researched allegations that we've been seeing over the past few weeks. But surprisingly, the post does make a few good points. > Placing a ceiling on the value of bitcoins is computer technology and the form of the hash function… until the limit of 21 m…

What's the point of a store of value if ultimately it cannot be exchanged for something else? One can also turn this point around: what requires the store of value to be the same thing as the medium of exchange? The store of value must be convertible into the medium of exchange, but that doesn't mean they have to be the same thing. Yet Krugman blithely assumes that they must be: "To be successful, money must be both…

he doesn't even bother to mention that very few people actually use dollars as a store of value: people don't keep their retirement funds in cash under the mattress.

Individual people, perhaps not. But the US dollar is the most widely-held reserve currency in the world, followed by the Euro. Wikipedia states that approximately 2/3 of reserve currency holdings are dollars.

Re: Bitcoin and positive vs. normative economics

#119

Post by coldtea » Sat, Dec 28, 2013, 8:55 PM UTC

bdcravens wrote: post #6

1) Bitcoin mining has a pretty horrible carbon footprint. ("but so does ..." doesn't eradicate this argument) 2) similar to the author's point that advocates can't tell the difference between "store" and "medium" of value, I can't tell you the number of arguments I've gotten in with people who equate a "store of value" to be the same thing as the "increase in value" 3) It's a 1% wet dream. Make money, potentially hid…

>1) Bitcoin mining has a pretty horrible carbon footprint. ("but so does ..." doesn't eradicate this argument)

From a logical standpoint, "so does X" (e.g gold mining) very much does eradicate this as an argument against BitCoin, unless there is some Y which has less carbon footprint than either. If there is not, then the carbon footprint it's an necessary evil, and a constant through all similar systems.

Re: Bitcoin and positive vs. normative economics

#120

Post by kordless » Sat, Dec 28, 2013, 8:56 PM UTC

pjbrunet wrote: post #101

smtddr wrote: post #9

>>BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions. So basically it brings an ability to the middle-class that normally only the top 1% have. We know wealthy people use tax loopholes(and a few of them, laundering) and... why do…

As far as making it illegal, I wonder if the blockchain gets to a certain size where it's easy to detect and delete, if that's not already the case. At that point I think the blockchain morphs into something harder to detect--maybe that technology already exists? I think the coin with the best developers will survive--maybe that's Bitcoin, maybe not.

I'm going with the blockchain that has the most transactions is the most valuable because of the meta data you can glean from it. That's currently Bitcoin.