Earlier quoted context omitted.
Government-issued currencies usually come with legal tender laws and citizens are required to pay taxes using the government money. Since taxes are not voluntary, this creates built-in demand for the fiat money. The creators of alternative competitor-money are punished as well. The libertarian position is that human interactions should be voluntary, so the coercion problem is where libertarians find issue first. A si…
>> Early adopters took a big risk on a fledgling technology I can't agree with that. Early adopters really didn't take a lot of risk, they ran a mining program for a while, or bought some BTC for a few cents to a few dollars.
The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market
181–190 of 327 posts
Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market
#182Earlier quoted context omitted.
I don't completely disagree but I will try to at least bring up some contrary views. > Untraceable money Bitcoin is pseudoanonymous with it's public ledger, hardly untraceable. Look into Monero for a proper anonymous coin. > Untraceable money means that corruption and tax evasion would be easier than ever. A contrary point is that today corruption and tax evasion is only for the very rich, see the paradise papers for…
>Bitcoin is not untraceable money, it can be even more traceable than normal currency. Fair enough, how about "trivial to launder" instead? The fact that every transaction is visible on the blockchain means that people who don't bother obfuscating their tracks (i.e. honest people who don't feel they have anything to hide) are the one who risk their privacy invaded: "hey, look, this is the address where we pay X his s…
> Fair enough, how about "trivial to launder" instead?
It's absolutely possible to do it correctly. But the number of people who have been caught by blockchain analysis on darknet markets show that it's either not trivial or people are really stupid.
Even after you get your Bitcoin by buying it cash, perfectly anonymously, you can still be caught. For example the person who bought them from can give up some information which may implicate you if they ever mess. You also want to spend your Bitcoins and presumably you might then leave a trace connecting on of your addresses to you. By analysing your address they might find your other addresses and it's game over.
> Then after that if I really want to make it difficult to follow the money I can split my coin in multiple addresses, do a bunch of dummy transactions to obfuscate where the BTC change hands, go through a bunch of coin mixers, maybe convert to an other crypto (monero for instance?), do a bunch more mixing, and then back to BTC. Good luck unravelling all that.
Multiple addresses, dummy transactions and mixers are already being traced through with fair success [1]. Monero gives good privacy, but you might still trip up when you go Bitcoin -> Monero or even Monero -> Bitcoin if you convert very similar amounts during a specific timeframe. And you must always shield your IP and browser fingerprint...
It's possible, but this is not "trivial to launder" for most people.
[1]: https://themerkle.com/blocksci-succesfully-traces-transactio...
Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market
#183It's interesting to see how this is playing out. Libertarians have long argued that government-issued fiat currency is a tool of state oppression. Now we have a real-world experiment demonstrating on a grand scale what happens when you create a currency by consensual fiat. I'd be interested to hear what libertarians think about this: Is Bitcoin truly the kind of currency libertarians have been advocating? Have I misc…
There's something that must be mentioned here: there are multiple visions for what bitcoin should be. Probably with much oversimplification, but as unbiased as I can be: One side wants bitcoin to be a decentralized store of value, untraceable, unseizable, a safe heaven for your wealth that's completely permissionless to use. The other side wants bitcoin to be a currency for the day-to-day life that is cheap to use, a…
Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market
#184It's interesting to see how this is playing out. Libertarians have long argued that government-issued fiat currency is a tool of state oppression. Now we have a real-world experiment demonstrating on a grand scale what happens when you create a currency by consensual fiat. I'd be interested to hear what libertarians think about this: Is Bitcoin truly the kind of currency libertarians have been advocating? Have I misc…
I don't see Bitcoin as ideal. I think its greatest weakness is that it's insanely deflationary, even worse than gold. But then again I'm not among those libertarians who dismiss the whole of Keynes or modern finance. I don't agree with Keynes on everything but he made some tremendously important observations. The big one is the velocity of money and the idea that money is a verb, not a noun. If you get this then you get 90% of the good parts of Keynes.
The other issue with Bitcoin is proof of work. It's wasteful as hell (PoW also stands for proof of waste) and also inherently biases the system toward oligopoly. Proof of work is subject to industrial economies of scale, leading inevitably to consolidation.
Proof of stake isn't perfect either. It's plutocratic, but then again so is proof of work since hardware costs money. It's a marginal improvement but not ideal. I don't think the ideal proof function has been discovered. It would be something that allowed anyone to "mine" with an acceptable but not excessive amount of overhead and that didn't contain strong systematic biases toward oligopoly.
The ideal currency would be one that could actually do the beneficial things central banks do but without the central bank. While Bitcoin is not going to do that, I don't see that as impossible. Bitcoin is really the first viable MVP of something I've heard best described as "software defined money." Software can be programmed to do a lot of things, so maybe software defined money could be programmed to do what central banks do but without a central authority.
In other words: if we can represent an ideal central bank mathematically then we can encode it into software. Imagine a currency that automatically "dropped money from helicopters" when monetary velocity fell, etc. Figuring out how to make this not game-able of course is hard as hell but it's probably solvable.
My problem with central banking is political and ethical. The moral hazard is simply enormous. IMHO the Federal Reserve is a fourth branch of government and one with only minimal democratic oversight. Placing fiat currency printing directly in the hands of government is dangerous though, so you're kind of damned either way.
The 2008 financial crash is a very good test case. In 2008 and the ensuing bailout years it became absolutely obvious to me that the degree to which you were saved from the crash was proportional to things like what school you went to (Ivy League, with a hierarchy there topped by Harvard and Yale) and how closely connected you were politically to the Fed and the center of the New York and Washington political power elites.
(Side note: those who have never lived on the East Coast probably don't understand the school hierarchy. What school you went to determines your social caste forever. It's a major reason I now live on the West Sieeeed.)
This always happens -- always -- when humans are in charge of stuff. It doesn't even require a conscious conspiracy or even a conscious sense of bias. It emerges from stuff like Dunbar's number and how humans weight things in decision making. If you are human you are racist, classist, sexist, and everything-else-ist. To claim otherwise is to be a liar or to not know thyself. Meat brains are not rational and suck at statistics.
The second deeper problem with central banks is that the system of interest rate setting and money lending is inherently feudal. Central banks set a base rate but you or I cannot borrow at this rate. We have to borrow from a bank at a higher rate. The interest I pay contains a plain vanilla handout to banks in proportion to their social distance from the Fed.
I understand some of the technical rationale for this but it's deeply and systematically unjust. A major side effect of this system is that every time there's a recession things like QE end up being wealth transfers to the top and in proportion to social connectedness to the Fed's governing elite. So every time the economy contracts the oligarchy is strengthened. It's easy to see the incentives this creates and they're perverse in the extreme. Top economic elites now have an incentive to mismanage the economy.
So the bottom line is that I like the innovation Bitcoin represents but I see it as only an alpha proof of concept.
Bitcoin as it is today is a bubble and is probably going to fail. It seems to be undergoing a deflationary collapse right now. Even if it survives this it is technically unable to scale to the size required for global monetary use.
Ethereum is a little better but still not ideal, and some of the people involved seem wonky. Most ICOs seem like straight up scams, which is not encouraging. Of course fiat money systems are riddled with pink sheet pump and dumps and Ponzi schemes and other scams so I guess that's just a thing. "All mature ecosystems contain parasites."
The core invention of software defined money and distributed byzantine consensus is an absolutely revolutionary innovation and is going to change the world.
Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market
#185Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market
#186Earlier quoted context omitted.
I don't understand the idea that a whale could move the market and make money off it. To move the market, you need to spend money. The only way it works is if you create some kind of momentum and the market continues to go up. But rational markets will sell into the artificial momentum and the price will be be close to where you started. The net result is that you lost money. I believe there is momentum in markets (t…
You are right, it doesn't always work, but it can work, and work really well. The way you make money is by creating volume and momentum. You buy in a low volume market, where it's cheaper to move the market, then if volume takes off and price momentum builds, you can sell much more volume without moving the market. We aren't talking about people liquidating their entire stakes, but you can make a few million here and…
This is the important part that took me a while to get.
This isn't someone with $100 million in BTC selling their entire stock for $150 million. This is someone with $100 million in BTC spending $200k to jumpstart a rise in price and selling off $3 million in the process and ending up with more-or-less $100 million in BTC.
Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market
#187Earlier quoted context omitted.
"The libertarian position is that human interactions should be voluntary, so the coercion problem is where libertarians find issue first." So basically everyone should be armed to their teeth? Because, if there is no state to impose control, a warlord will emerge who will. Or is there some other solution to the problem that humans have known tendencies toward violence and power hunger?
But Wouldn't Warlords Take Over?[1] [1] https://mises.org/library/wouldnt-warlords-take-over
I guess maybe I'm just a bit put off because of the blurb towards the opening about "society A, which is filled with evil, ignorant savages who live under anarchy" (conveniently not naming any specific society, but hint hint, it reads a lot like the author implies either Somalia or Colombia). I thought we were past the whole racist Noble Savage thing.
Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market
#188Earlier quoted context omitted.
It isn't illegal to circumvent the cabal by agreeing to use a different currency. The sole goal of currency is a common medium of exchange. If that common medium is being manipulated then the market will perceive that as damage and route around it.
>If that common medium is being manipulated then the market will perceive that as damage and route around it. Isn't that basically the problem with bitcoin though? We can't perceive if it's being manipulated or not. E: Actually that brings up another issue for me. Wouldn't that just be a run on the currency? So the last people to get out of manipu-coins are the ones stuck holding the bag?
No system promises that its actors will behave morally. What we're talking about is whether or not you fundamentally believe that government can and should exert force on the market. Those of us who believe they should not don't see a perfect and moral market on the other side, we just would prefer to exchange problems of force and authority with problems of interpersonal relationships.
Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market
#189Earlier quoted context omitted.
"The libertarian position is that human interactions should be voluntary, so the coercion problem is where libertarians find issue first." So basically everyone should be armed to their teeth? Because, if there is no state to impose control, a warlord will emerge who will. Or is there some other solution to the problem that humans have known tendencies toward violence and power hunger?
But Wouldn't Warlords Take Over?[1] [1] https://mises.org/library/wouldnt-warlords-take-over
... which seems rather weak to me.
Re: The Bitcoin Whales: 1,000 People Who Own 40 Percent of the Market
#190Earlier quoted context omitted.
>Since taxes are not voluntary >The libertarian position is that human interactions should be voluntary, so the coercion problem is where libertarians find issue first. Do you believe obeying property law is voluntary? I find it to be coercive.
Instead of answering your question, I will leave this: Very small children understand and recognize property, since it is a natural right. The toy in my hand is "mine," and when some other kid comes along and takes it, I get upset.