Bitcoin and positive vs. normative economics • Hacker News Board

Re: Bitcoin and positive vs. normative economics

#381

Post by baddox » Sun, Dec 29, 2013, 4:08 AM UTC

XorNot wrote: post #377

baddox wrote: post #358

Earlier quoted context omitted.

Virtually any service that can feasibly be arranged and delivered online is fundamentally about trust, and you don't even need Bitcoin to solve many of those. I'm reminded of an example which I believe was given by some libertarian writer, perhaps David Friedman. One big role of governments and private institutions is the regulation of service industries through testing and licensing. In many places it is illegal to…

Yeah, just gonna be a suckers game for all those people who get burned by people who provide bad legal advice while we churn through figuring out who knows what they're talking about it and can build up that "good" reputation. EDIT: I mean sure, some people are going to die of contaminated food. But once the trustworthy labs are known, everything will be fine! It's not like companies or people ever change in quality…

Surely you know that government regulations in every industry also came after bad incidents in that industry. Similarly, cures for diseases tend to be invented after those diseases come into existence, and poor product reviews come after people have already bought the products.

You seem to be implying that government regulation prevents any bad incidences from ever occurring, when that is absolutely not the case. Heck, even with government licensing, most people still turn to non-government sources of information (namely reviews from previous customers) to determine which providers to use for things like lawyers and doctors.

Re: Bitcoin and positive vs. normative economics

#382

Post by baddox » Sun, Dec 29, 2013, 4:09 AM UTC

XorNot wrote: post #375

baddox wrote: post #352

Earlier quoted context omitted.

> Is there something I'm missing here? You're missing the fact that it's very possible to use coercion to discourage certain groups from voting at all. Just target the groups that are likely to vote for your opponent, and you've essentially used coercion to manipulate the election.

This is a problem which would be solved, somewhat ironically, by the US adopting mandatory voting. Shift a really nominal fine onto "not voting" (like $30), and it will become politically impossible to get away with marginalizing groups from voting. Because people might ultimately think "well my vote probably wouldn't have mattered" when the line is 8 hours long on a Tuesday, but they will definitely care when they g…

Mandatory voting might solve that problem, but it might introduce others.

Re: Bitcoin and positive vs. normative economics

#383

Post by pjbrunet » Sun, Dec 29, 2013, 4:14 AM UTC

icambron wrote: post #340

mortenjorck wrote: post #295

Earlier quoted context omitted.

I appreciate your putting the distinction between Krugman's arguments into greater relief – I believe I have conflated them somewhat in talking about second order effects. For the time being, let's ignore those and concentrate on the primary purpose of Bitcoin's infrastructure, to facilitate decentralized value transactions between arbitrary parties. It is the infrastructure's fitness for this purpose that I see as g…

Krugman actually takes that on directly in the article: > 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. Even if I buy this (which I don’t, entirely), it doesn’t solve my problem. And…

I think a certain entertainment factor will keep the price from reaching zero too--lots of volatility, cheap transactions, very low barrier to entry. Seems like you could even build a game like "Trade Wars" on top of the various exchanges, that would be pretty interesting. http://en.wikipedia.org/wiki/Trade_Wars

Re: Bitcoin and positive vs. normative economics

#384

Post by XorNot » Sun, Dec 29, 2013, 4:15 AM UTC

baddox wrote: post #382

XorNot wrote: post #375

Earlier quoted context omitted.

This is a problem which would be solved, somewhat ironically, by the US adopting mandatory voting. Shift a really nominal fine onto "not voting" (like $30), and it will become politically impossible to get away with marginalizing groups from voting. Because people might ultimately think "well my vote probably wouldn't have mattered" when the line is 8 hours long on a Tuesday, but they will definitely care when they g…

Mandatory voting might solve that problem, but it might introduce others.

Such as?

Australia has mandatory voting as do other countries. We don't have problems with it.

Re: Bitcoin and positive vs. normative economics

#385

Post by ReidZB » Sun, Dec 29, 2013, 4:19 AM UTC

jellicle wrote: post #323

ReidZB wrote: post #251

Earlier quoted context omitted.

The typical US voting system allows coercion? When I voted, I went into a publicly visible booth, recorded my vote, pressed submit, and went about my business. I suppose I could have been forced to take a picture with a cellphone, but I could have just selected the option they wanted, taken the picture, and then swapped back to the candidate I wanted. Is there something I'm missing here? Any way you slice it, even if…

You perhaps are not aware of absentee voting.

Ah! Of course. You're right. I've never used an absentee ballot, so it completely slipped my mind.

This is actually why Helios voting (which is end-to-end auditable) doesn't prevent coercion either: your voting is done 'at range' (online), so a coercer can just stand over your shoulder. Just about the only surefire way to prevent coercion is to somehow physically give someone security while voting.

Okay, well, anyway, my point still stands; even if coercion is possible in the current-day low-tech system, if we're going to discuss a cryptographic replacement, we might as well restrict ourselves to the baseline "best-studied" ones so far, virtually all of which include coercion-defeating mechanisms.

At a minimum, if a physical presence were the norm with cryptographic voting and there was an option to be absent (like today), then we would be in an identical scenario with regard to coercion while gaining the end-to-end auditability of the cryptographic scheme. It seems like a net positive, although many critics of cryptographic voting see the increase in complexity as unworkable.

Re: Bitcoin and positive vs. normative economics

#386

Post by XorNot » Sun, Dec 29, 2013, 4:20 AM UTC

baddox wrote: post #381

XorNot wrote: post #377

Earlier quoted context omitted.

Yeah, just gonna be a suckers game for all those people who get burned by people who provide bad legal advice while we churn through figuring out who knows what they're talking about it and can build up that "good" reputation. EDIT: I mean sure, some people are going to die of contaminated food. But once the trustworthy labs are known, everything will be fine! It's not like companies or people ever change in quality…

Surely you know that government regulations in every industry also came after bad incidents in that industry. Similarly, cures for diseases tend to be invented after those diseases come into existence, and poor product reviews come after people have already bought the products. You seem to be implying that government regulation prevents any bad incidences from ever occurring, when that is absolutely not the case. Hec…

Regulatory bodies were invented after it became apparent no one can trust private industry to act in the best interests of the public. The FDA was invented because blue milk was being mixed with wall plaster and sold anyway.

The onus, now, is to prove your product is safe. Not that it doesn't contain wall plaster. You have to prove you've taken precautions against deleterious outcomes at the outset.

And that's the problem you're not addressing: how, in providing legal advice, does a new player enter the game? And what do you do if everyone in it is actually really bad at what they do, but see no money in improving it?

You've managed to say "well the system as it is kind of works that way" and so your conclusion is "hey, let's strip away some protections, and definitely stop trying to think ahead about what outcomes we're trying to achieve."

Because you know, what could go wrong? Just hope you're not in the "learner experience" losses I guess. You sign up for unlicensed drug trials right?

Re: Bitcoin and positive vs. normative economics

#387

Post by pjbrunet » Sun, Dec 29, 2013, 4:25 AM UTC

mapgrep wrote: post #70

natrius wrote: post #51

Earlier quoted context omitted.

We weren't in imminent danger of hyperinflation. I think mass adoption of Bitcoin will cause hyperinflation. If every merchant you patronize today accepted Bitcoin, would you rather have Bitcoin in your bank account or dollars? I'd rather have Bitcoin. They're easier to transfer, they can't be counterfeited, and their supply can't be manipulated. If every merchant accepts Bitcoin and every consumer agrees with my log…

Bitcoin went up more than tenfold in less than six months. Then if fell by more than half in less than one month. So I strongly disagree that most people would want to use that for their checking account, paycheck, etc. I am also baffled by "they're easier to transfer" than dollars. Yes you can email BTC. But I can literally hand you dollars. No smartphone needed! And large amounts are trivially easier - I squiggle s…

"But I can literally hand you dollars." You can do the same with Bitcoin, just print the keys on a piece of paper and hand it to the person. Right?

Re: Bitcoin and positive vs. normative economics

#388

Post by yohanatan » Sun, Dec 29, 2013, 4:29 AM UTC

icambron wrote: post #258

mortenjorck wrote: post #31

Krugman is to Bitcoin as Ebert was to video games. The central failure of Krugman's understanding of cryptocurrencies is in the value of mining. It's not simply throwing energy away into solving useless math problems; it's spending energy to create infrastructure. That infrastructure is the part that does have intrinsic value, that can be used for something else in the same way gold can be made into useful things. Lo…

The positive part of Krugman's argument that discusses floors is saying that external forces have ensured that dollars and gold are useful even in the event that people stop wanting them as a value store. Your infrastructure argument seems to say that, all of that spent electricity has second order effects that make it a net positive for society. Not sure I agree, but fine. But that does not provide a floor of Bitcoi…

> If BTC starts collapsing, perhaps all that infrastructure will go on to do great things for society, but how does that help Bitcoin?

If the infrastructure goes on to do great things for society then it has (and has always had) intrinsic value and thus the price of BTC rebounds (or more likely never collapses in the first place).

Re: Bitcoin and positive vs. normative economics

#389

Post by holmak » Sun, Dec 29, 2013, 4:30 AM UTC

icambron wrote: post #345

holmak wrote: post #263

Earlier quoted context omitted.

> Ask yourself: why buy today what can be bought tomorrow cheaper? I know the the correct, rational answer to this question: "I won't buy it today, or ever, because it will always be cheaper the next day." (And then the deflationary spiral begins!) But if this is really true, why has anyone bought a Playstation 4 or Xbox One? They will undoubtedly be cheaper in two or three or ten years. Well, consumers might be tota…

Yes, remember that this is a utility calculation. The cool thing about buying Xbox One now is that I can play it now . So let's say these are my options: * Buy it now for $300 and play it for 10 years * Buy it in ten years for $30 and play it then (I have no idea how much an Xbox actually costs.) So the question is whether that $270 is worth those ten years of playing it. A lot goes into that: what interesting things…

I agree with your assessment -- utility with respect to time is the first explanation I thought of as well. People (and firms) have a limited ability to anticipate or defer purchases. (I can't wait 50 years to buy a lifetime supply of food to feed myself!)

You also mention that this limited ability to defer purchases in the face of deflation is what makes short bouts of deflation not catastrophic -- it is somewhat difficult to get the deflationary spiral going if you can't actually wait to purchase things.

Given all this, the interesting question to me is, how much deflation does it take to actually cause a deflationary spiral? The answer is likely complicated, given that it depends on the specific utility functions for each consumer of all the goods and services that they consume.

Empirically, we seem to be able to cope with a decent amount of deflation, at least when it is limited to certain goods, like video game consoles, computing power, other manufactured goods, etc. (In some cases, even over very long timespans.)

Re: Bitcoin and positive vs. normative economics

#390

Post by itchitawa » Sun, Dec 29, 2013, 4:35 AM UTC

loceng wrote: post #271

tolmasky wrote: post #229

Earlier quoted context omitted.

... Why? It seems to me that it works the same as any system with early adopters willing to take on risk. People that got into twitter early make more than people who get in later, without any necessary correlation to how much work they've contributed. Early investors in a company often put in no work beyond their capital, should their shares be redistributed after it becomes a sure thing? If bitcoin fails, the losse…

I feel your comparison is apples and oranges, other than that the current structure of Bitcoin gives gain to early adopters, and early adopters / investors in a business potentially allows investors to have higher gains. However they are different systems. Why can't the system exist just based on the incentive of the value that system brings? Why can't that be reward enough? The issue here is allocation of resources…

Who's an early adopter? Before December, every single day in bitcoin's history was a good day to invest and be an early adopter. But nobody knew at the time. They could have lost everything. Nobody knows when the final peak will be and if today is part of the early or late adopters stage. Another point - Even late adopters can obtain millions of dollars worth of bitcoins just buy buying them with millions of dollars. In other words, people who are enormously rich with real money (by whatever unfair ways) can be enormously rich with bitcoins too. All we have is those same rich people plus a few new ones (early adopters). Someone who inherited a fortune can buy bitcoins and be another "unfairly" rich person. What difference does it make if they got their money from bitcoin luck, inheritance luck, or anything else?