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Bitcoin and positive vs. normative economics

krugman.blogs.nytimes.com

401–410 of 520 posts

Re: Bitcoin and positive vs. normative economics

#401
post #386
post #381

Earlier quoted context omitted.

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 p…

> Regulatory bodies were invented after it became apparent no one can trust private industry to act in the best interests of the public.

Perhaps, but by now it should be apparent that no one can trust regulatory bodies to act in the best interests of the public either.

> 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?

How do things work now, in industries that are less regulated (like babysitting), or even in industries that are highly regulated (like restaurants)? I'm not an entrepreneur or a businessperson, so I don't really know, but I suspect that if I wanted to offer legal advice for a living, I would attempt to get statements from well-regarded individuals or organizations (perhaps experienced lawyers, or law schools) affirming my ability. I would use those statements to advertise my services. This is just a guess, based on what inexperienced lawyers already do in our current system.

> 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."

No, my solution is to strip away political authority, and with it the possibility of regulatory capture, a drawback which I think far outweighs the benefits.

> Just hope you're not in the "learner experience" losses I guess.

I've been to several bad restaurants, but my reaction is to give them a poor review rather than to wish for the government to ban them.

> You sign up for unlicensed drug trials right?

I don't sign up for any drug trials, but I might if there was an illegal drug I thought was necessary for my health but which was banned by regulatory agencies. And that has actually happened with the FDA.

Re: Bitcoin and positive vs. normative economics

#402
> [Placing a floor on the value of gold is that you can make pretty things of it.] Placing a floor on the value of bitcoins is… what, exactly?

The fact that the blockchain serves as a tool for global distributed consensus. There's unlimited number of applications that can take advantage of that, irrespective of actual price of Bitcoin as a currency.

Re: Bitcoin and positive vs. normative economics

#403
post #398
post #395

Earlier quoted context omitted.

If I were Australian, I would have a problem with it, because I am what you might call a principled abstainer. But apart from personal issues regarding perceived rights violations, there are several obvious advantages and disadvantages, similar to any aspect of election design. I'm not saying compulsory voting is game-breaking, but merely that it's a compromise that one could argue is not desirable.

You're under no obligations to actually vote in Australia, just to show up. You can freely get your name ticked off, put a line through all the candidates and write "try harder" and walk out.

Fair enough. It's hardly the worst idea I've ever hear of, nor the most upsetting to be personally (the fact that "modern" Western governments still reserve the authority to perform military conscription is far worse). I would still prefer not showing up for paying the fine.

Re: Bitcoin and positive vs. normative economics

#404

Earlier quoted context omitted.

I am not a libertarian and do not have a political agenda, but it is imaginable that certain parts of the government could be replaced with the structure like this one. I don't know how the transition could happen, but at the end, the mining in the network will be done by citizens, bitcoins will be named "bitvotes", and every citizen will mine those bitvotes, or they could be distributed fairy (one bitvote to each ci…

Voting is a solved problem. I’m not saying that the idea of using bitcoin technology to solve problems beside monetary systems is a bad idea (in fact, I think it’s a very interesting concept), but really, democracies around the world already have established and efficient voting systems that work well enough.

I would argue that money is also a solved problem.

Re: Bitcoin and positive vs. normative economics

#405
post #167

Earlier quoted context omitted.

> It is deplorable that he used the word "evil" to describe Bitcoin. Krugman is clearly an intelligent man, but in his public writing he has a habit of declaring things he doesn't like as "evil." Given we know he's not stupid, I assume it's to increase the attention he receives. Based on the re-shares from my left-of-center friends, it tends to work.

A few minutes after I posted that, I regretted that my comment focused on that. Krugman wrote another article implying that Bitcoins were "barbarous" and likened them to digging up mostly useless gold. I feel like he must think Bitcoin is serious because he is writing about it regularly- I wish I had focused more on his economic theory in my comment... maybe next time.

Like many technology and finance pundits, he seems to be currently in a love/hate relationship with Bitcoin.

See also Business Insider's recent turnaround and subsequent breathless tabloid-style coverage of cryptocurrency news.

Re: Bitcoin and positive vs. normative economics

#406

Earlier quoted context omitted.

> 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.

What's the carbon footprint of an elected government creating more money?

The correct question would be "What's the carbon footprint" of the money creation activity of an elected government -- since, you know, they don't only do that.

And an even better question would also ask, "What's the carbon footprint of not having a government creating more money?"

Re: Bitcoin and positive vs. normative economics

#407

Earlier quoted context omitted.

I dealt with virtual game currency before I really started messing around with banks. There was a ton of, "What do you mean I can't do this", and "What do you mean this takes longer than five seconds.. four DAYS?!", and "they're closed? So I can't? What? You're joking with me, right?" I understand that dealing with money is incredibly hard due to regulation, but I would like something to use as a medium of exchange w…

Most of that probably has more to do with horribly bad legacy systems at the banks than it does with what currency is used. A little bit of competition will do well in showing what is possible, but shouldn't automatically replace the reigning currencies.

Definitively solving the problem of "closed on Sunday" would seem to constitute more than a little competition for legacy financial institutions.

Re: Bitcoin and positive vs. normative economics

#408
post #346

Earlier quoted context omitted.

All currencies rely on belief (like those flats in Monty Python). It is possible that gold could lose global belief, but unlikely, given the long history of belief. The US dollar too could lose faith, but again, a pretty good history of trust. Bitcoin? I think belief and trust battle novelty a bit. Will enough people believe, in 20 years, to power the computations necessary at that point? Or will a more novel and exc…

Gold isn't a currency at the moment. Even if no one wanted gold for its store of value properties, they'd still want it for electronics, science etc. at which point the market would revitalize.

Which is to say (not disagreeing, just saw an opportunity to jump in): it has a floor value. It might not be $1000 or even $100 per ounce, but it is at least a floor of $1 or $10.

The complaint Mr Krugman is registering is that Bitcoin's don't even have that. If my car is totaled, I can always sell it for $100 for scrap. There is no bit scrap dealer.

Re: Bitcoin and positive vs. normative economics

#409

The title is pretty sensationalist. He doesn't really come close to arguing that it's evil in the piece.

Obviously. Krugman wields his power at NYT to troll market anarchists / public choice theorists and not much else.

I used to think he was so cool.

Re: Bitcoin and positive vs. normative economics

#410

Earlier quoted context omitted.

> Getting dollars requires going to a physical place to get physical bills. My debit card/square/venmo might have something to say about that...

I'm taking about cash. For cards and digital services, the Bitcoin advantage is near zero transaction fees.

Zero transaction fees? The bitcoin network costs something like $3.5 million per day to run, and optimistically handles tens of millions in transactions. That's a transaction fee of 10%.

You just don't notice it because they pay the miners by printing money. I'll be really interested to see what happens when they stop that and start relying on up front transaction fees to fund the network.

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