A side note here about capital controls: Bitcoin allows money to be borderless, which is natural. Capital controls are an artificial construct of the state, often used to prop up the perpetually failing fiat money.
The second issue is economic. When the money supply of your currency is not constrained (by gold, or otherwise), then it inevitably inflates, often unpredictably and uncontrollably. The death of a fiat money usually has disastrous effects on the people, especially on the poor. Unfortunately, fiat money has a short lifespan, on average.
The libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily (without state privilege, in particular), then there is no problem. Bitcoin is such a system: all participation in Bitcoin has been voluntary. Early adopters took a big risk on a fledgling technology, and some have been rewarded with handsome returns.
Early writing about cypherpunk money usually mentions anonymity, which Bitcoin does not have (yet).
> Where is this experiment going in the long run?
Isn't that the trillion-dollar question? :-)
In any case, I can't take seriously anyone who thinks that humans aren't interested in freedom because they want to be free to do things, i.e. I want to be free to see my family not only in that I don't want someone to stop me from doing so, but I also want the means to be able to do so. The one is more or less pointless without the other. And that obviously requires more than negative liberty. Or that, in another vein, that capitalist enterprises are not vehicles of accumulated power that sustain themselves by exploiting workers, ordered along hierarchical top-down principles. One only need step into sociological reality to see as much.
Buuuuut, they bought it with fiat currencies, in many cases USD. So... right there the entire idea breaks down. Still, maybe that's unfair. A valid criticism of this argument is that it's a variant of the the serf comic argument (or genetic fallacy) in which those embedded in a bad system may not question it because they benefit from it.
The real problem from a libertarian perspective is that bitcoin (and really all PoW blockcahins) just encodes how a new State, a plutocratic one based around processing power and energy availability, is formed. This is in a very literal sense what bitcoin encodes, with the miners being the only folks with any real votes (in that if miners as a group refused to mine other currencies and actively discourage others from doing so, other currencies cannot scale and are locked out).
Not that bitcoin is scaling all that well. Or eth for that matter.
As we've seen from recent research, Bitcoin is slightly better than existing systems at discouraging monopolies (because even accidental misuse could crash the currency), but I seriously doubt a mining duopoly dictating most of the future of bitcoin is something that any libertarian actually calls a positive outcome, other than a snarky nod to damaging existing states.
The long term evolution of the system is pivotal on some new, non-PoW scheme. PoS is the major contender right now. There might be other methods as derivations (e.g., PoW coupled with physical location, PoS with term limits, PoS with accreditation, etc). Non-PoW systems will also scale much more effectively than PoW systems, as well.
I could never really make sense of that position. Voluntarily by whom? Why would you ever voluntarily agree to a high-inequality society where you are at the lower end?
I don't think bitcoin is a valid example because it's something that (right now) you can choose to ignore completely without any negative consequences for you. Therefore, high inequality is not necessarily a problem.
The moment bitcoin would become the single dominating currency, the situation would be completely different.
>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.
I'd like to remind the world there are such things as consequentialist Libertarians who view the value of their policy preferences based on their outcomes rather than the NAP.
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?
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.
Not really.
The real underlying demand for a currency comes from the advantage that everyone gets by using the same currency in a common market.
The 'required for tax' purposes is a side-show.
Does anyone with any financial background appreciate that most businesses in the US want to use a single currency for their US transactions, and definitely not a 'grab bag' various currencies?
Nobody wants that. Nobody.
Also, the requirement to 'pay taxes' in a common currency is not coercive.
As long as there is liquidity in currency, then you can exchange whatever asset you want for USD and pay your taxes then.
Libertarians are still free to use whatever they want in their business dealings. Of course, we all use USD because it's pragmatic and useful.
"Capital controls are an artificial construct of the state"
Western nations do not really have 'capital controls' other than for the purposes of taxation and fraud. And sure, you could say 'taxation' is an 'construct of the state' but it's certainly not 'arbitrary'.
"When the money supply of your currency is not constrained (by gold, or otherwise), then it inevitably inflates, often unpredictably and uncontrollably."
Totally false. Inflation is a target by most central banks. They can make it positive or negative, generally, and target specifically 2% for certain reasons. You can argue against the 2% if you want, but not that managed currencies are inherently 'one thing or another'. They are whatever they are designed to do.
By having a 'perfectly hard currency' - you forgo the risk of having some crazy person doing monetary policy - but worse - you lose the possibility for having monetary policy altogether. How could you possibly not mention this as the most obvious drawback to a strict currency (i.e. no monetary policy)?
Monetary policy is a very powerful instrument for helping the economy along. Without it, it would be impossible to ensure enough liquidity as the market expands. Also, the economy would not be resilient to 'shock' events.
The reason zero economies on planet earth used a fixed-currency regime is because it does not work.
"The libertarian position on wealth inequality is that as long as the distribution of wealth was determined voluntarily"
This position is false, as capitalism itself is game of gaining leverage towards monopoly. Without some degree of redistributive taxation, 90% of the US economy would be in the hands of a small group of people. (And P.S. I'm no communist)
"Bitcoin is such a system: all participation in Bitcoin has been voluntary. "
Again, false.
Bitcoin is not a currency. If anything, BTC has proven how ridiculously bad this 'crypto-currency' idea has been as a currency. By it's very own 'relatively strict' status, it has increased it's value ('deflationary' in your terminology) - and has become useless as a currency.
-----> If we were using Bitcoin as a currency, the economy would be tanking due to a deflationary death-spiral <-----
EDIT: by 'death spiral' I'm referring to a common economic idea. As prices of goods go down, investors tend to hoard cash rather than invest it, as holding currency might be a better investment strategy than spending. Without investment, other parts of the economy slow, furthering the impetus to holding cash. The 'mass deflation' we've seen in BTC is equally as destructive as 'mass inflation' we would see from some really poorly managed gong-show currency.
Put another way: yes, you might like it if your 'new tennis shoes' were 1/2 price next week, and 1/2 that price the week after - hey - cheap tennis shoes! But think about it: has the economy just magically been 100% more productive each week? No. Of course not. So - what's happening is a monetary game that will soon hit your paycheque (i.e. your boss can pay you 1/2 your salary each week because that's your real market value). But worse - because of this drop in prices, your boss will be less likely to expand because his cost of capital equations show him it's smarter to hold the cash.
But it's all moot: Bitcoin is not a currency. It could be used as a currency, but it's not. It's just a purely speculative thing that's going on. People trading numbers for money 'because'. There's no rhyme or reason. There is no 'big government vs. small government' ideology here. There is no 'libertarian' behind BTC currency. It's just a meme with money that's interesting to watch.
Since anyone that received an "unfair advantage" with government-issued fiat can turn around and use it to get an unfair advantage in bitcoin as well?
Anyway, I think most Libertarians would be cool with a handful of ultra-wealthy, because they really think they can conquer the market someday and be one of them.
1. I believe very strongly in the sovereignty of the individual.
2. I prefer more open and incentive-driven markets.
3. I’m skeptical of governments, particularly large and powerful ones, because they’re inefficient, rely on coercion, and are too tempting as prizes to be captured for power, prestige, and wealth.
However, these are all on a spectrum and I’m open to trying other points along that spectrum if they work better than our current system. I also recognize that the optimal system may be too distant from where we are today to even move towards it directly.
So for healthcare for example, our system is dreadful, but I’m not sure that pure free markets would be better. But I’d strongly prefer a public option (and maybe even single payer), or a well-designed hybrid system like Singapore or Switzerland has to fully nationalized healthcare like UK.
Similarly, I’m open to trying basic income, a land value or VAT instead of income tax, and other alternative systems. I’m particularly in favor of systems that are more stable and resistant to changing from the whims of the current government.
I personally don’t understand how anyone who thinks the government is awesome can continue to believe that when they watch episode after episode of unchecked police brutality, or constant encroachments on civil liberties, or the entire Trump administration.
Ultimately, Libertarians stand for the freedom of people. Currently, when a government takes and uses 1/3 of every dollar earned, the society is not free. Note: that ratio would be a lot higher in expensive areas like the bay area, etc.
1/3 doesn't sound like much oppression, but when you add in the multiplicative effect on the spending side, it becomes more onerous because everything is more expensive. The day care has to charge 50% more, etc.
It's about Maslow's hierarchy of needs. Most people, 99% are still working on their bottom tier. It would be morally, ethically, and economically wrong to stop their progress, by taking 1/3 of their productive efforts.
As the above posts mentioned, we do differentiate between natural resources and earned resources. Natural resources like Land should be taxed because you didn't create it from your own labor. On Earnings However, if you make your bed in the morning, you should be able to keep that labor - no one should be allowed to come over and use 33% of your bed.
The existence of ultra-wealthy people isn't inherently bad.
The question is about the alternative. If everyone's quality of life improves (including relative to the ultra-wealthy), I'd rather that happen than reduce everyone's quality of life out of a sense of "fairness."
Claiming most libertarians act against their own interests because they think they can become ultra-wealthy is straw-manning the view.
WRT most of the wealth being held by a small number of people, I think it's inevitable that power structures like this arise in human societies. If you leave things unchecked, some people will acquire way more wealth than others. Doing away with regulations will likely only make that worse, not better. I'm more of a socialist, so I would prefer that we somehow limit the amount of wealth that a single individual can hold, because it gives them a tremendously unfair amount of control over the destiny of humanity as a whole.
In this techno-feudalist scenario, being one of the Bitcoin 1% or even 10% means the world is at your feet, and if you've maintained good opsec, nobody may even know how much of their lives are your property.
Also many wallets are simply unspendable due to transaction costs.
Or mine it if you have access to cheap electricity and can afford the equipment to be near the top in hashing speed.
In either case, you can see how Bitcoin wealth is biased to people with lots of fiat to begin with. I question if there could be any new currency that would not suffer the same inequality.
However, I think it's a bit early in the life of cryptocurrencies to make any evaluation about how the experiment is going. To understand why libertarians obsess over currency, I recommend one look at some history[1] instead, and see that fiat currencies have long been associated with war, oppression, and corruption.
To answer your last question, I don't think cryptocurrencies will actually be used unless there is a need for them. If inflation in the U.S. becomes extreme, for example, people will naturally flood to cryptocurrencies as a better store of value and/or way of transporting value. There have already been examples of that happening in countries with currency problems, such as in 2015 when many Argentinians began experimenting with Bitcoin[2].
But for the foreseeable future, most people will probably not notice any big problems using their local currency, and so they will continue to do so.
I personally don't think Bitcoin will last. Instead, another cryptocurrency will take over. Probably many will take turns over the years.
[1] https://en.wikipedia.org/wiki/A_History_of_Money_and_Banking...
[2] https://www.nytimes.com/2015/05/03/magazine/how-bitcoin-is-d...
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 global currency to escape the (possibly shitty) fiat issued by your state and the banking system. Basically money for "the other 6 billion people" or "the unbanked" or whoever else that needs it.
The two visions don't contradict each other, however they have different priorities, and they make different technological compromises when faced with a problem (decentralized scaling).
This doesn't take away anything from your question, but one has to consider this divide when looking for answers.
Bitcoin encourages hoarding while it's going up. Who knows where this runaway phenomenon will lead.
At least the dollars and euros exchanged for it don't go anywhere. Bitcoin has fast become a store of value and redistribution of the world's wealth to early adopters, as any new fixed money supply would be.
Setting aside all the other issues with Bitcoin (scaling, energy use, volatility) it seems like this would be a major issue if Bitcoin was ever on the precipice to being considered "mainstream". People would most likely strongly object to having to go purchase bitcoin from a bunch of people who bought in early in order to continue functioning in their lives. It is one of the big, largely undiscussed, reasons I believe that Bitcoin will never truly catch on.
I would say that cryptocurrency has one advantage over traditional systems of money in that it governs with the consent of the governed - if the richest 4% of the cryptocurrency world become too aggressive and stifle innovation to protect their status, cryptocurrency's nature makes it very easy for the other 96% to take their ball and play elsewhere. There have been several 'hard fork' moments already (Bitcoin Cash, Ethereum Classic, etc) and what the majority of people went with was mostly determined by who inspired their confidence. I don't think Greenspan or Yellen could have gotten the majority of miners to switch to their system, that takes the confidence of the majority.
So to answer your last question - I would expect the experiment to lead to a more brutal and cutthroat competition than we are used to, but I also expect the rules to be more fairly enforced, and the incentives of the rich and the rest to self-correct if they begin to diverge.
I can't speak for other libertarians, but for me, finding that tradeoff worth it is what it means to be a libertarian. How clear-eyed I am about the costs I couldn't guess.
It should be emphasized that bitcoins don't have a fixed value (bitcoin can't force an exchange rate), and that anyone can created a competing currency (bitcoin can't force people to accept bitcoin). So although bitcoins may be concentrated, that doesn't necessarily mean that wealth is being concentrated. A lot of (non-libertarians particularly) mistakenly conflate currency with wealth.
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.
It's not unlikely the same reasoning (i.e. 40% of coins on top 1000 addresses) is used for the larger claim.
But that says very little. A bitcoin address after all can be shared by many users, in the same way a bank vault can contain money from many individuals. It's quite likely that the top addresses are held in a (semi) custodial function by parties like Coinbase or Kraken, which have hundreds of thousands to millions of customers, but may store their users' coins on a number of addresses that's a tiny fraction of their user count.
Regardless, unequal wealth distribution isn't entirely unique to bitcoin, either. The top 1% worldwide own about 50% of the world's wealth, the richest 10% own about 85%.
Essentially a few big investors who've cornered the market, acting in concert, can move the market essentially according to their own desire. I read yesterday that the order book for btc was $33 million (don't know what the daily volume is; could anyone enlighten me? Not an active bitcoin follower but have experience in markets). The top 1,000 BTC holders own about $100 Billion at current prices. Even a few of them could concertedly buy small amounts of BTC at rapidly increasing prices, then if that leads to a huge rally and increase in volume (like yesterday) they can sell into that volume and make a nice profit. Lots of other things like that they can do: https://www.girardgibbs.com/securities-fraud/stock/market-ma...
Not saying they do those things, but that is a real risk in unregulated, concentrated markets where there is no real way to quantify value
EDIT: montecarl pointed me to the gdax site, also https://data.bitcoinity.org/markets/price/6m/USD?c=e&t=l shows price and vol data (im a noob) and it looks like volume is much higher, on the order of 100-150k BTC / day so over $1B USD volume at $17K / BTC.
That's not indicative of something that's a store of value.
It's nearly impossible to map an address to its owner (or owners).
https://www.justice.gov/usao-sdny/pr/acting-manhattan-us-att...
Might sound like a success story now, but at a certain point he was down 70% on his investment!
The guy basically said, let's put bitcoin to buy a coffee litmus test. If I were to buy a cup of coffee in the current frenzy, I would be at the cashier waiting a day for the transaction to go through and when it does go through the fee for transaction would be greater than cost of the coffee.
If that is true, how is bitcoin better? Would that transaction even go through considering miners would prioritize transactions with larger fees.
But the poker guy is right, bitcoin is not really appropriate for replacing credit cards for small purchases at the minute for several reasons:
1) You must wait between 1-20 minutes to get your transaction included in the next block.
2) You must pay a fee that could be 100% of the total transaction or more (for small purchases).
3) You must pay capital gains tax on your purchase (possibly at the short term capital gains rate even), which complicates your tax reporting.
Issue 1 and 2 may be solved with technological solutions soon, if the lighting network (distributed settlement layer on top of bitcoin) is successful.
You would still have to open a "payment channel", which requires a single Bitcoin transaction. So you might fund this single payment channel with $100 USD, and use that to buy all your coffees for a month or two. I think that's no different to having $100 in a checking account.
Is this the metaphor the bitcoin-digerati want?
Too much control on the hands of few.
"Among the coins people invest in, bitcoin has the least concentrated ownership, says Spencer Bogart, managing director and head of research at Blockchain Capital. The top 100 bitcoin addresses control 17.3 percent of all the issued currency, according to Alex Sunnarborg, co-founder of crypto hedge fund Tetras Capital. With ether, a rival to bitcoin, the top 100 addresses control 40 percent of the supply, and with coins such as Gnosis, Qtum, and Storj, top holders control more than 90 percent. Many large owners are part of the teams running these projects."
[1]https://www.bloomberg.com/news/articles/2017-06-16/the-u-s-i...
What worries me more is the elextricity consumption:
https://motherboard.vice.com/en_us/article/aek3za/bitcoin-co...
Is it risky? sure. Do you HAVE to buy? of course not. Anybody can sit on the sides and shout "bubble, ponzi, pyramidal scheme", but then don't whine when the early adopters and risk takers got to buy it at just $16K and 3 years later it trades at $1M.
I know shitcoins can, because the Market Cap is low and it is easier for whales to manipulate the market.
But... This also happen with BTC now days? There are millionaires who puts all their BTC in one exchange? Jesus.. they are crazy.
Edit: Nevermind, it was eight people.
And in that statement, there is the fraud.
Per Wikipedia:
>The U.S. Treasury classified bitcoin as a convertible decentralized virtual currency in 2013.[1] >The Commodity Futures Trading Commission, CFTC, classified bitcoin as a commodity in September 2015. >Per IRS, bitcoin is taxed as a property.[2]
[1]https://www.fincen.gov/news/testimony/statement-jennifer-sha...
[2]https://www.irs.gov/uac/newsroom/irs-virtual-currency-guidan...
In the US it is classified either as a currency, piece of property or a commodity, and as of Monday it will also be available as a futures contract of a commodity.
Neither commodities nor futures contracts are consider securities, as they fail the clause of the Howey Test that would make them dependent on a single entity or management group.
This is why commodity futures trade is managed by the CFTC (Commodity Futures Trade Commission) rather than the SEC (Securities Exchange Commission).
In fact, while some other tokens and ICOs have been found to be securities both in the US and abroad, no country has formally noted Bitcoin as a security - many treat it as a currency under a new classification for eMoney, Digital Currency or Virtual Currencies.
https://bitinfocharts.com/top-100-richest-bitcoin-addresses....
In fact, many parties like Coinbase have come out and openly stated that only a small percentage of their users' coins move around, and therefore the vast majority can, and is, stored in 'air gapped cold storage'. i.e. on private keys that never touched a network of any kind. This could result in a few cold storage addresses which carry funds for orders of magnitude more users, rather than a few individuals.
In fact, if you follow your own link you'll find many of the addresses are in fact identified as belonging to exchanges like Kraken or Bitfinex cold wallets. e.g. the second richest address is a $1.9 billion Bitfinex wallet.
So I don't think the title of the research '1000 people own 40%' is hard to dismiss at all. It could well be true, but a mere list of addresses isn't proof to that claim.
Only in a context of mutual absolute trust, in both honesty and security competence.
Any person who has the password can transfer the whole wallet contents to a new wallet that they alone control, while maintaining plausible deniability.
Any person who unwillingly compromises the password to a third party has compromised the entire wallet.
Not at all, look up multi-signature addresses. There are addresses where you need N-of-M signatures to move the coins.
So for example you could have a 6-of-10 multi-sig wallet for a company, so that a majority of the executives were necessary but the money wouldn't be lost if up to 4 of them lost their keys or went rogue or whatever.
Yeah, I really dislike that the title sounds like it's a fact.
I do wonder how much people try to manipulate perception with media to serve their trading interests... fake news is so easy these days. Just look at what happened yesterday: a bunch of online news outlets output a bunch of speculation about the new 15,000 high, over the next 12 hours it created a sort of bubble going up to ~17,000 that popped and re-established it's original price point at ~15,000.
It's possible the opposite is being attempted here: trying to create a short term crash bubble, so they can get ready to buy on the down, before re-establishing it's original natural market value.
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 (they are definitely NOT perfectly rational). But is there enough momentum to really make money with this scheme? I highly doubt it.
Also consider that a group of whales would have to work together to do this. Do you really trust your whale friend to buy at the same time you do? What if he front-runs you and you end up buy the bitcoin he just bought last week for 10% lower?
I don't buy the theory that there are a group of "whales" sitting around planning how to manipulate markets together.
There is strong incentive to collude: collusion unlocks the potentially powerful profit engine of market manipulation. You make more money working together than you could on your own. If people try to screw each other too much the whole thing falls apart, as market movements are no longer predictable to the colluders, and their advantage is gone. So yeah collusion can break down in cases but as a rule people understand they make more money together
If you don't buy that theory, id recommend reading about Solomon brothers or even watching the wolf of wall st. Martin shkreli did this stuff too. I think it was Jim cramers tactic for a while (talk your book on tv, get retail volume in small cap stocks and sell into that) JP morgan and other early wall st financiers did this sort of stuff. It happens in the real world even now; I've heard from friends at big banks that they know people who will sometimes do stuff like this
market manipulation is how people make real money in unregulated markets. cornering the market is and always has been the holy grail for market manipulation and profiting in unregulated markets. It's why regulation exists. Its a theory in the same way that evolution is a theory
could still manipulate markets with 40% concentration and that much liquidity, but would be much harder than if the daily volume was on the order of tens of millions like i mistakenly thought
Untraceable money means that corruption and tax evasion would be easier than ever. Democratic governments would be worse off in dealing with that, because unlike totaliatrian regimes they won't be able to round up BTC-rich people and break their fingers until they give their secret keys.
Deflation means that the rich will get richer doing nothing while the poor won't be able to get a loan to bootstrap their businesses. Forget about trickle down economics, this is downright "trickle up".
I have yet to hear a reasonable rebuttal to these claims. Every time I see these points brought up in the bitcoin community it's met with a bunch of hand waiving and claims that they're "FUD" and that the poster doesn't know what they're talking about. So please, BTC enthusiasts, educate me so that I can stop spreading this "FUD", where's the flaw in my reasoning?
Bitcoin is not untraceable money, it can be even more traceable than normal currency. It could be stablished as a law that public money when being spent in the blockchain needs to be auditable by the people (identities of sender and recipient known), and this way you would end up with even less corruption than the current system.
> Deflation means that the rich will get richer
Wrong. Rich people don't have money, they have holdings. Most of the holdings that rich people nowadays have are not money. Deflation just benefits the savers, as opposed to the spenders. Some savers might be rich but not all. Incentivising saving instead of consumption may make the planet a bit greener. Plus, if one day we stop measuring cryptocurrency value with a fiat-unit of measure, maybe we find out that the cryptocurrency value is actually the stable value. The asset that is not stable is the fiat currency because it's being depreciated all the time. The day all stores in the planet denominate prices in cryptocurrency, the bad consequences of deflation (hoarding for the sake of profit) will be almost imperceptible.
> 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 example. In a sick way this could give the common man more power and maybe make the world a little more balanced.
Also tax collection is already heavily based on social pressure and doing the right thing. It's not obvious that the threat of getting caught, compared to the social stigma, weighs more.
> Deflation means that the rich will get richer doing nothing while the poor won't be able to get a loan to bootstrap their businesses. Forget about trickle down economics, this is downright "trickle up".
I also don't like extreme deflation, but I also don't like the inflation based system we have today.
Inflation basically eats away at your savings. This is a bigger problem for everyday poor people compared to the rich as they have more investment options. Their buffer they hold in banks or in cash is smaller percentage wise, they can more easily invest in housing and they can more easily grow their capital as money breads money. The problem with rich getting richer is already present.
Without inflation loans would harder and would combat the very real problems with too much loans (housing bubble, student loan crisis, ...). It could also help to reign in fractional banking as it would get riskier/harder.
If anything, it is more traceable and public than physical cash. The difference is that you don't know who 63dca1f6eddfb659d71ec5244ab950a4 or e3557c1e589e2a687f6afe1a253196ca are. But when you do associate a person with a given key, that association probably persists over time.
If your currency needs multiple 'Explain it like I'm 5' posts, it really isn't for the masses; it's for the world's technocrats.
Of course, there are truly poor people out there who can't have a dollar to spare, but it's mostly due to geography, corruption or war, not evil capitalists.
The people who are most able to take risks (in the investment sense) are those with the most. An exponential growth system such as this only widens the gap, voluntary or not.
Everyone can get in, but the benefit is unequal. You need money to make money. This does not solve any equality issues on the grand scale, and only elevates a few lucky ones. To expect people to educate themselves on cryptocurrencies and understand the market when half the people in tech don't know what's going on is not reasonable.
Gambling's rarely been mandatory. If you were going to recommend your folks to have a punt, wouldn't a casino be better? You know the odds then.
"But Musa's generous actions inadvertently devastated the economies of the regions through which he passed. In the cities of Cairo, Medina, and Mecca, the sudden influx of gold devalued the metal for the next decade. Prices on goods and wares greatly inflated. To rectify the gold market, on his way back from Mecca, Musa borrowed all the gold he could carry from money-lenders in Cairo, at high interest. This is the only time recorded in history that one man directly controlled the price of gold in the Mediterranean."
A comparable alternative may be gold, and it would be fair to say that the gold market could be heavily impacted by a few large holders who choose to sell their holdings. However, those holders tend to be governments. Many of the top holders are fairly representative governments, so initialization of a mass gold dumping is less likely than if they were individuals or small corporate entities, I think. They would be throwing away value that belongs to a large group of citizens, and there would be trade ramifications because their trading partners would take it in the face on their own reserves.
The real reason many people don't initiate aggressive sales is that, barring a mass exodus from a collapsing financial instrument where the price is going to drop anyway, nobody wants to hurt their own mark-to-market by pushing down the prices. The only exception to this would be a fire sale where there is a mandate to liquidate a holding in order to return value to creditors.
Not only that, but price impact is often reversed by other, later trading. So even if your intention is to put selling pressure on the instrument, it may not have a very lasting impact on the price.
However, if you assume everyone else will follow suit and race to the bottom, then there's a definite first mover advantage. That's almost certainly not the case for precious metals, and generally not the case for currencies issued by stable and relatively uncorrupt governments, but it may be the case for BTC because it is new, volatile, and unsecured/unbacked.
Note that this implies selling off X always decreases its price. This is not true if Y is $100 (people were willing to buy more X at $100 than we had X at all), but even so a market usually has something like a bid-ask spread, so if we were trading a small amount of X we could maybe even sell it all off without moving the big price.
So really, whether this crashes the market for X depends on how much people value X. If only a few people thought X was valuable, they probably all own it, so it's worthless. If everyone wants X and are willing to pay just a bit less to get it, Y doesn't really change much from $100. There are also non-currencies like equities that essentially have a price floor: below the price floor there is basically no risk that the item will ever be worth less than that (this could be determined by something like the total value of property owned by a business).
It's less the mechanism and the implication that people imply by following whales. Why should a store-of-value market react when someone sells a small amount regardless of their current holdings?
Written another way: People who would be financially penalized greatly for selling might sell!
The media and public believe that a group of people who want nothing to do with fiat currency might all of a sudden decide that they were wrong all this time and take massive positions in fiat currencies. Why? My only guess is that the media believe people buy Bitcoin just to ride the wave up when what's actually happening is people are exiting the fiat system. This is why Bitcoin's price curve is similar to trading pairs associated with hyper inflation. A Venezuelan who holds dollars isn't going to suddenly want to take a huge long position on the Bolivar. At minimum they'd exchange the only minimum amount to transact with someone who doesn't except the dollar (or Bitcoin) yet.
See, this is just nonsense. You follow this to its logical conclusion and the only free people have no government. You're free to reject it all. There's plenty of places where you can just say "fuck it" and nobody will come bother you. Go ahead. Nobody does, though, because they quite like the security of living in a city, where no matter what the emergency help is just a phone call away, and one can watch live video from the surface of Mars on a smartphone.
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.
>If anything, it is more traceable and public than physical cash.
That's true, but cash has its own set of limitations. Using cash to transfer large sums of money in not very convenient and good luck explaining to the border police why you have $20 million in cash with you. Spending and laundering large amounts of cash without raising suspicions is also pretty difficult.
>But when you do associate a person with a given key,
s/when/if/
>that association probably persists over time.
How so when you can generate a virtually infinite number of new addresses whenever you like and the current practice is to avoid reusing the same address if at all possible?
Sure if I buy some drugs in BTC and then I see that some money transits directly from the destination address to the known address of some politician then I know that something fishy is going on.
But if the money is then split and merged to a bunch of different addresses, then moved to an exchange in china where it's converted to LiteCoins, then put through a coin mixer, then moved to an exchange in Brazil where it's converted back to Bitcoins then I wish good luck to the IRS employees.
And you can do all of that from the comfort of your home in an afternoon, through TOR, without having to reveal your identity to any 3rd party.
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 salary and some of it got transfered to the known address of this sex shop website".
If you want to hide your tracks however it's easy. Say I'm a politician and I want to accept a bribe. I can get a briefcase full of cash, but that's bulky, not very convenient and I could get caught if I try to move it (especially across borders).
Or I could try to open a bank account in some place where people look the other way but it's more complicated, involves third parties who could expose me (panama papers, lux leaks...), leaves a paper trail etc...
With BTC I click "generate a new receive address" in my wallet, give it to my anonymous benefactor and that's that.
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.
>It could be stablished as a law that public money when being spent in the blockchain needs to be auditable by the people (identities of sender and recipient known), and this way you would end up with even less corruption than the current system.
Public spending is already supposed to be auditable in the democratic countries I know of (except in very specific cases, like "black boxes" for paying informants etc..). Generally corruption and waste is when people overpay for a service, like say paying 10x the cost for the construction of a new stadium, favouring a contractor over an other etc... I don't think BTC would help greatly with that. There are many, many ways of making "technically legal" purchases that conceal corruption, I don't think it would improve things very much. "Here, have this very valuable painting by Manet as a thank you for your help", "Here, let me make a charitable donation to your foundation", "Here, let me change this piece of regulation that will benefit your company", etc...
Unless you want to force all citizens (in the public and private) to publish their addresses I'm not sure you can really reign that in. And even then, how would you enforce that?
> 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...
In terms of political philosophy, most libertarians come at it through a rights based framework (see: Bastiat, Locke) and believe rights to be non-arbitrary. You seem to be suggesting a more self-interested framework which I'm not going to argue for/against.
In terms of reality, libertarians skew wealthy and less social. Like most groups they are more likely to rationalize a system that is congruent on the surface with their place in society.
Well yes, I too can think up the philosophy of xg15ism in which people like me are well off at the cost of everyone else - and then demand that society implement it, pretty please.
I just don't see how that would bring us forward in any way.
So if a currency goes up in value, that's actually economic 'deflation', because the prices of goods go down.
Now - I don't agree with any of the commenters arguments at all, but the terms 'inflationary' and 'deflationary' are used in that context.
There are some that argue the inflation and deflation are not a function of the price of goods - rather - simply the amount of money in circulation and that's it. I think this is the Austrian position.
They could in theory be 'reclaimed' with a majority of mining power but it's hard to tell if coins are lost or their owners are just idle.
Most of the consequentialists wind up becoming pretty standard neo-liberals as they are willing to consider government intervention when needed.
I considered what would happen if something like bitcoin would become a global internet currency, and any way I sliced it, the upside was too huge not to try.
You're right, imperialism did cause problems, but the extreme poverty has been shrinking. And now we have the mechanisms for almost anybody to get out of it. I grew up very poor, as in barely enough money for basic food and new clothes once-twice a year. Now I'm in the top 3% of US earners (not counting Bitcoin).
> but the extreme poverty has been shrinking
Indonesian 12 y.o. who makes Nike sneakers for 1$ a day will probably disagree. Humanity as a whole have made tremendous advancements in medicine, engineering and agriculture, technology as a whole have been advancing in giant leaps, yet benefits of those advancements are largely felt by 10-20 countries and 3-5% of the population. Even in the US some people cannot afford insulin and other types of basic healthcare. Workers's wages are stagnant for the past 50 years, while their productivity was steadily rising (https://www.theatlantic.com/business/archive/2015/02/why-the...).
> And now we have the mechanisms for almost anybody to get out of it. I grew up very poor
Survivorship bias, "if I've made it, then anyone can".
I would argue they are very tied, but that is a much larger argument not needed here. To give the short and incomplete version, they are both derived from the idea of exploiting others for profit. The level of exploitation is just much less in capitalism and masked behind the guise of fairness, ignoring power dynamics, original capital, and exponential growth considerations, etc. Again, this argument is very incomplete as stated here, but they are not orthogonal concepts. How much of a connection they have is a very valid debate, one not needed here fully though.
> extreme poverty has been shrinking. And now we have the mechanisms for almost anybody to get out of it.
Getting better does not mean that everyone can get out of poverty. We also haven't gotten that better. Most of Africa is still being exploited and most living there do not have any realistic means to get out of it. The countries as a whole still struggle on a macroeconomic level to get out of poverty due to the exact exponential growth issue seen in Bitcoin but with general investment.
The US is not representative of the rest of the world, and also is still far from equal opportunity. While we're on that subject, good luck easily buying cryptocurrencies (accessible to a non-tech audience) while living outside the US. Even my Canadian friends struggle getting Coinbase to let them.
Bitcoin is only really accessible to the tech community, an already privileged community.
>Wrong. Rich people don't have money, they have holdings. Most of the holdings that rich people nowadays have are not money.
Isn't one reason for not hoarding cash (and instead investing it in various holdings, stock market, etc...) is that money loses value? If I was a millionaire in dollars I definitely wouldn't keep that on my bank account, slowly having it lose its value. If I was a millionaire in BTC I'd have a hardware wallet with my secret keys in a safe and that's about it.
>Deflation just benefits the savers, as opposed to the spenders. Some savers might be rich but not all.
Sure, but conversely I can tell you that the people who don't save money are overwhelmingly poor. For a big chunk of humanity saving money is a luxury.
>Incentivising saving instead of consumption may make the planet a bit greener.
Coin mining will take care of filling that gap, don't worry.
If rich people reduce their investments because of deflation how do you redistribute wealth?
>Plus, if one day we stop measuring cryptocurrency value with a fiat-unit of measure, maybe we find out that the cryptocurrency value is actually the stable value.
Well yeah, 1BTC == 1BTC, that's stable I guess. If BTC replaces fiat it'll stabilize eventually but it will still be deflationary. My arguments were about that, not the current instability.
>The asset that is not stable is the fiat currency because it's being depreciated all the time. The day all stores in the planet denominate prices in cryptocurrency, the bad consequences of deflation (hoarding for the sake of profit) will be almost imperceptible.
That's kind of the hand waving I was talking about in my previous comment. I don't see how you can justify you jumping to that conclusion.
How can you assume that switching from an inflationary to a deflationary economy "will be almost imperceptible"?
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.
This is pretty much even sillier hypothesis than "if people agree to work together towards common good, through the forces of cooperation, they would achieve prosperity greater than it's possible in any competitive capitalist system" and that one was tried and proven false.
People agreeing that the violence is not the right way to resolve disputes? Author must somehow missed all of history right untill yesterday and have no friends or at least only friends without neighbours.
... which seems rather weak to me.
> The 'required for tax' purposes is a side-show.
Why can't it be both? :)
> Totally false. Inflation is a target by most central banks. They can make it positive or negative, generally, and target specifically 2% for certain reasons.
This is a bit questionable. There are good reasons why a slight positive rate of inflation is a good thing, and while you could try to target a negative rate, it would almost certainly be very harmful to the economy.
Basically, people and even many companies have fewer contracts or prices for selling things than for buying things. So when relative prices need to adjust, this adjustment happens more smoothly and faster when prices don't have to decrease in nominal terms (because e.g. an employee whose compensation should go down in real terms will fight very hard against a nominal decrease in their income, but will fight less hard against a broad nominal increase in their outlays).
So you should generally aim to have only very few (if any) items in your basket of goods whose prices are decreasing.
(Economists call this the zero lower bound and focus on salaries, but I'd expect the effect to apply to other prices as well.)
I'm saying a managed currency can be whatever you want it to be. I agree targeting deflation would be bad.
Hint: deflation is kind of bad, and we have massive deflation with BTC :)
Many countries expressly forbid themselves to use monetary policy to manipulate their economy. Their monetary policy has singular goal: to keep inflation low and stable.
So maybe it's not such a graet tool although tempting.
Lending or investing your BTC would always make you net more than just hoarding it (at least when all prices are denominated in BTC already).
> Sure, but conversely I can tell you that the people who don't save money are overwhelmingly poor. For a big chunk of humanity saving money is a luxury.
True, I didn't say that low-class can save. But most savers are middle class IMO.
> Coin mining will take care of filling that gap, don't worry.
Wrong, 2 links:
https://www.bloomberg.com/view/articles/2017-12-07/bitcoin-i...
https://blog.bitcoin.org.hk/bitcoin-mining-and-energy-consum...
> How can you assume that switching from an inflationary to a deflationary economy "will be almost imperceptible"?
Because when all prices get denominated in BTC, you won't see your holdings appreciate. The only effect you will see, caused by deflation, is that prices of things diminish over time. Which is kind of what happens nowadays with hardware (because it's the goods where the effects of technology improvements are noticed in the most sensible way), however I don't know anyone that hoards their holdings to be able to buy a better and cheaper computer tomorrow.
One link more:
Checking accounts (M1) have grown by (only) 8%/year over the past 2 years.
Savings accounts (M2) have grown by (only) 6%/year over the past 2 years.
Physical cash in circulation has grown by (only) 5%/year over the past 2 years.
Even if we value bitcoin today only by it's future 0% emission rate starting at around the year 2036, bitcoin shouldn't have been rising more than 7 or 8% per year relative to the US Dollar. Anymore is unlikely to be sustainable. Am I missing anything?
Citation: https://www.federalreserve.gov/releases/h6/current/default.h...
You yourself have hit on the justification for Bitcoin's use.
The various decentralized stablecoin projects (disclaimer: I'm involved with one of them, MakerDAO) attempt to create competitive currency as laid out by Hayek, using collateralization and continual supply/demand tweaks to encourage a stable market price.
From that perspective, Bitcoin is indeed more like a trailblazer and a collectible precious metal, and not a serious contender for actual currency status. Still, it seems to have an important role in the ecosystem of denationalized currency.
No. Some people bought it with fiat currencies. Others mined for it. Still others exchanged goods and services for it.
> Still others exchanged goods and services for it.
I'm not sure what your point is here. It's not difficult to imagine existing state currencies influence these processes. I've also pointed out it's not a very good argument for either side of the libertarian fence.
But hey, let's focus on minutiae as opposed to the larger ethical and social questions surrounding bitcoin and derivatives. That seems like a rad use of time.
The process had to be bootstrapped somehow. And given that the world's economy at the time bitcoin was invented ran on fiat currency, it's not surprising that fiat currency was used to help bootstrap the process.
> I'm not sure what your point is here.
My point is that your original claim:
> Buuuuut, they bought it with fiat currencies, in many cases USD. So... right there the entire idea breaks down.
is false. Just because the process was bootstrapped with fiat currency does not imply that "the entire idea breaks down."
> I don't mind money being more concentrated among tech people, they are generally more rational and tend to spend on important things.
Yeah, I don't but that at all either. Even so, you are basically advocating for an oligarchy led by tech and removing autonomy from everyone else in the world. That's a terrible dystopia.
Or to put it another way, how do you measure "equality of opportunity" if not by "equality of outcome"? If your theory of "equality of opportunity" differs from the measured "equality of outcome", doesn't that automatically mean you've omitted some characteristic of the real world from your theory?
Many aspects of our societies have lottery-like qualities.
But this seems like "too convenient" an explanation to me, it could be used to justify literally any system. For any system, one could assert that actually the opportunity is equal, but the variance is so great that the measured outcome "accidentally" arose out of the totally-equal-honest "opportunity" probability distribution.
I'm not prepared to accept such weak justifications of any supposed equal-opportunity system, I'd prefer to have a system where the outcome provided me with some verifiable indicator that the original opportunities were actually equal, in a similar sort of way where one can have verifiable proofs in cryptographic protocols.
That is indeed a large part of the point of the social/welfare state.
Plus, most people don't own that much currency anyway; they either get a paycheck (which can start coming in BTC) or an asset like a house, which is valuable in any currency.
Don't exchanges verify identity? Wouldn't you be committing fraud by maintaining good opsec?
Point being is that someone may eventually leak an exchange database with those details. Then the word's out. Kind of like Equifax.
It would certainly be possible to prove identity when transferring BTC in/out of an exchange, but make it exceedingly hard to prove that they ultimately make it to/from wallets you control.
But of course possible does not mean it is likely.
Here is Joseph Dejacques using "libertarian" for the first time in a letter to Proudhon (incidentally also an early feminist work; the letter was a rebuke to Proudhons male chauvinism):
> Flogger of woman and absolute serf of man, Proudhon Magnan, you use your words for a lash. Like a slave-driver you seem delighted to disrobe your beautiful victims (on paper) and flagellate them with invectives. Moderate anarchist, liberal, but not libertarian, you want free exchange of cotton and candles and you seek to protect man against woman in the exchange of affectional human passion. You cry against the great barons of capital, and you would rebuild a proud barony of man on vassal-woman. Logician with misfit eyeglasses, you are unable to read the lessons of the present or the past; you can discern nothing that is elevated or at a distance or in the perspective of the future.
(EDIT: Worth noting above is that he sets "moderate anarchist" up as less radical than "libertarian")
And this is another paragraph from the same letter, denouncing not just property rights (one of things he admired in Proudhon's was his "property is theft" slogan) but denouncing restrictions on consumption:
> Do I need, for example, one sun for myself, one river for myself, one forest for my own, or all the houses in all the streets for my own? Have I the right to become the proprietor of them to the exclusion of others, especially when I do not need them? If I have not that right, is it any more just for me to wish, as under the system of contracts, to measure to each one—according to his accidental ability to produce—just what proportion he should receive of all things; how much of the sun’s rays he is entitled to, how many cubic feet of air and of water shall he allotted to him, or the extent of his promenades in the forests; what number or the parts of the houses he may occupy, what streets he may walk in and what streets he must keep out of?
While you probably won't agree with much he says - as a libertarian socialist even I disagree with much of what he says (he's very much what Marx would have written off as one of the utopian socialists, or a hippie a century early), the letter is well worth a read both because it has historical importance in being the start of libertarianism (right wing libertarianism was first born about a century later), but also because it is incredibly beautifully written even if one disagrees with it:
https://theanarchistlibrary.org/library/joseph-dejacque-on-t...
But right-wing libertarianism prioritize property rights over liberty.
They also endured 90% drops in value from early peaks to troughs. Bitcoin could have gone to zero at any point if the system had failed. (It still could)
Some invested time learning about new technology that could've gone nowhere.
Very few. In more/most it's just taxable.
>> They also endured 90% drops in value from early peaks to troughs. Bitcoin could have gone to zero at any point if the system had failed. (It still could)
OK, sure, but again not a massive risk if your initial stake was tiny.
And it was a stake rather than an investment - it's not really an investment as you're not investing in a productive endeavour. More like buying and holding an asset.
From your perspective, isn't it a massive risk not to sell at this all time high value?
If they hold or sell, do they deserve whatever outcome?
Because that would not solve the problem, and it's quite naive to think it would. This gets into lots of debates in ethics that are far from solved.
I do however donate regularly to groups that do economic development in African communities across the world though (more than the cost of a new iPhone annually), so no, I am not a hypocrite (fully at least).
In fact, if you want a great non-profit idea, make a company that translates bitcoin profits into economic development in those communities. My donations have recently been coming from said profits.
---------------------------------
Regardless of whether I am a hypocrite or not, it does not change the facts of the world and bitcoin. Just because my actions do not match perfectly does not mean they shouldn't. That's not a valid argument against my ideas, just against me personally.
> you're still typing into this tech forum
I didn't know using technology is immoral now if others are suffering injustices. Not to mention that there's plenty of utilitarian arguments about cascading effects of convincing others.
Let's look at an example of Bill Gates - if instead of investing any money or time in Microsoft, he gave away everything he could, he would not help as many people in the end. Again, you need money to make money. Of course you need to also consider the other effects of Microsoft in the calculation, which is no easy matter, but the general point is that investment by him eventually led to greater helping of those suffering injustices.
This does not consider that subsidizing someone's current lifestyle doesn't nearly have the impact of helping them develop economic means. It's a classic give a fish versus teach fishing.
And again, someone being hypocritical is not an argument against the logic. It just means that person is selfish and hypocritical. I don't claim that solving these problems is easy or not in direct conflict with human instincts.
There are also issues of fixing injustices justly. It's hard to give up x% of your wealth for a good cause when others are not. I would love to see something like a global 5% reparations tax (scaled by income, benefit from injustice, etc) that I would happily pay because it would be just for all. Of course, getting that to happen is kidding yourself at best.
All of your flawed arguments are still based on you assuming that I'm a hypocrite and no information that I gave you. I would call double BS on your reasoning for disagreement given that you had no knowledge of it when you took the position. Your argument neither had the knowledge nor logic to stand even with the knowledge present.
Not really, if you didn't tie up significant proportions of your net worth in the initial buy.
> If they hold or sell, do they deserve whatever outcome?
Deserve is a worryingly moral word to apply there.
My only dispute is that early adopters took a lot of risk. It's not like they sunk their life savings into opening a small business.
Which means Bitcoin proponents should really save the store-of-value label for later on down the road when it looks and behaves more like a store-of-value.
> The top 1000 holders of gold
> don't have anywhere near 40%
> of the market.
So just the to 2 holders of Gold have almost 40% of the market, and the top 10 have 80%.
* GP surgeries (doctors offices) are private businesses, and may provide NHS services or private services.
* The NHS contracts out for a growing number of services, ranging from operating whole departments (e.g. Virgin operates the out-of-hours walk in centre for non-emergency care next door to the A&E/ER at my local hospital) to cleaning.
* The NHS rents out facilities to private providers, and individual NHS trusts may derive income from carrying out private work (though the proportion of this income is limited, and the revenue goes back into their budgets). This is in addition to NHS staff often renting NHS facilities to carry out private surgeries outside their normal rotation.
* Dentists are mostly private and generally dentists that do NHS work also do private work, and often mix and match with the same patient (e.g. the NHS does not reimburse more expensive types of fillings, so your dentist may recommend e.g. things like porcelain veneers on visible teeth and stick to NHS options for less visible work).
* Pharmacies are mostly private - the NHS mostly operates pharmacies only in hospitals etc. but they too can be privately operated.
* 10% of the population have private health insurance. This is mostly "top up" insurance offering additional services or faster turnaround for non-essential surgeries etc. than the NHS.
* Many types of healthcare services are mostly private. E.g. while you can get some types of cosmetic surgery on the NHS
As it stands, the NHS is the most cost-effective hybrid or private system in any developed country. Too cost-effective some would say; to the point where it comes at the cost of making things more miserable for patients. But that's what you get when we pay far less than any other countries at a comparable income level.
1. Maybe "fully nationalized" isn't technically true, but my understanding was that the UK was widely regarded to have a nationalized healthcare system. Not really interested in whether that's technically true at the margins unless there's some major policy impact.
2. "Cost-effective" is an interesting term, because it assumes we agree on what "effective" means. I want choice, innovation, better health outcomes, more convenience, shorter wait times, etc., and I'm willing to pay some premium (but not 4x or something) for them. For these reasons, I don't want want the NHS system here (nor do I think it'd work here), despite it being better for some values of "cost-effectiveness".
3. If by "cost-effectiveness", you just mean per-capita spending on healthcare, are you sure the NHS is the most cost-effective of any developed country? Doesn't seem to be the case here: https://en.wikipedia.org/wiki/List_of_countries_by_total_hea... -- maybe you're using some more complicated measure of spending per health outcomes?
Which countries do you consider not to have a nationalized healthcare system, then we can make a comparison?
Note that even in the US, the government covers roughly half of all healthcare expenditure. The UK government covers about 79%.
> 2. "Cost-effective" is an interesting term, because it assumes we agree on what "effective" means. I want choice, innovation, better health outcomes, more convenience, shorter wait times, etc., and I'm willing to pay some premium (but not 4x or something) for them. For these reasons, I don't want want the NHS system here (nor do I think it'd work here), despite it being better for some values of "cost-effectiveness".
Even if you for some reason believe you don't get this with the NHS (meanwhile most people here considers the US system to be terrifying), you have all of that by combining the NHS with private top-up insurance. The average cost of combining NHS and private insurance in the UK is far lower than the average cost of healthcare in the US.
So you can get the benefits that socializing services have in ensuring universal coverage and ensuring nobody drives up overall costs by waiting until things get more expensive to treat, with the ability to pay for whatever extra services you want.
Fewer people go without coverage, and you get cheaper coverage and more choice since you can still pick and choose from private providers but also get a public option if you prefer that.
In fact, because of the ability of the NHS to rent out resources, even privately paying for operations etc. tends to be so much cheaper even at top end London specialists that if you're in the US and need elective care it is worth checking the cost of flying to London, having it done, and staying in a nice hotel while recovering. For a lot of conditions that'll be cheaper.
Personally I find it telling that it is almost impossible to find people holding your positions in places where people have experienced these socialized systems unless they have the money to pay far more for care that is out of reach of most people.
For 3., note that you're referring to PPP adjusted numbers. The UK costs have also increased more the last few years than I realized. Even so, while the PPP adjusted data does not have the UK stand out as much as it used to, the gap between the UK and e.g. the US still illustrates the most important point.
This is where I think some libertarians wander off from what those largely in favour of state actually think.
I think a lot of people would agree there's a lot wrong with government, but most would also rather have one. They just want one that's run better.
Your libertarianism seems quite pragmatic and I personally sympathise with the ideas behind libertarianism - lack of coercion, lack of people making arbitrary moral decisions (like drug laws) and imposing them on society.
However I also like public services, welfare safety nets (BI is indeed interesting) and various other things that only come with state-level cooperation.
I would argue that most libertarians aren't anarchists, but it's a popular strawman tactic from those arguing against it (particularly on the left). It's almost a cliche: "You know where is a libertarian paradise with no government? Somalia! Hurr durr!"
I think we all agree that government has problems. Libertarians just think that the problems of government are inherent and fundamental, so the solution is usually in less government (but not no government), while "liberals" (huge spectrum here, I know) seem to think that the answer is more government.
And we all agree that we need better government, but libertarians think that public accountability works better the closer the citizenry is to the decisions being made, and liberals seem to favor more centralized decision-making, I guess for efficiency? I'm not entirely clear on why :)
Universal healthcare being one example (at least our system seems simpler than your deductible / premium / medicare / medicaid / etc. chaos), UBI being another.
I'm not saying it's all libertarians, but I have interacted with quite a number on the net, over the years, who would scrap those things entirely. I, personally, think inefficient government is a price worth paying for such things, but that we must seek to do better.
You should be very interested then where your sovereignty comes from. At the moment it comes from having above yourself an entity so powerful that you and others around you (that are 10 times, 100, 1000 times as powerful as you) are equally insignificant and uninteresting as long as you pay your dues and don't make a fuss, ie don't try to overtake one another in violent way (even in some non-violent ways that in the past proved bothersome for the overlord so they were forbidden).
The world is full of military technology that just invites anyone with a goal to put the finger on the trigger. So far best invention to control this state of affairs is to have the most dangerous weaponary in hands of just few actors preferably with non-overlapping geographical zones of interest.
You are open to trying basic income.
Do you think we should have laws and regulations to protect the environment?
If so, then I think you have graduated from Libertarian to Liberal. Ha ha! I did the same thing after I realized that a true free market libertarian ideal is easily abused by corporations and the wealthy, and the common man has no chance.
> A valid criticism of this argument is that it's a variant of the the serf comic argument (or genetic fallacy) in which those embedded in a bad system may not question it because they benefit from it.
I'm just saying, the idea that there is in fact an equitable pre-distribution of agency and power to draw from is fallacious. It doesn't mean we shouldn't try and create better systems; just that we shouldn't pretend such a thing existed.
And it IS factually correct in that there was state-maintained fiat currency at the genesis of nearly every story, we just both agree it doesn't matter that much.
Consider how uninteresting this exchange is, and how much of our collective time you've wasted by not reading the entire post. You've spent MUCH more time talking with me (and I with you) than if you had JUST READ THE POST.
If you want to argue a minimum amount that whales would need to sell to manipulate the markets, that's probably better for the thread than arguing about semantics.
The arguments you've outlined are drawing a distinction between which kinds of property are thought to be just by certain schools of thought. However, this is entirely unrelated to the fact that all forms of property are coercive -- enforcing them ultimately requires (the threat of) violence.
Most people fail to make this distinction unless they properly think it through, though I personally find it most grating with the type of libertarian who argues with the "non-aggression principle" or variants thereof. I believe people make this mistake because it can be uncomfortable to admit to yourself that you're in favor of something that is coercive, even when the coercive thing is clearly a good thing overall. I'm sure there's a fancy name for this type of fallacy :)
IIRC the guy that came up with it agreed with that reading on it!
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.
They soon learn to say the word that other people use when they want to keep stuff. The actual meaning of the word, and that some people's ownership seems to have legitimacy, doesn't dawn on them until later.
(Just to clarify in the age of the Internet: I think we should respect ownership. But the argument that we should do it because it's an innate concept with babies is a bad one, even if it was true.)
When a very small child in a poor family looks at what is under a wealthy family's Christmas tree he's also going to be upset. Does that make a relatively equal distribution of Christmas presents a natural right?
I see no basis for decrying all coercion and mandating transactions be voluntary yet also overlooking the biggest contributor to coercion: property.
People on hackernews and in general tend to view "negative" feelings, envy, etc... as generically "bad". These feelings are evolutionary signals from your primal brain that something isn't going right. Its up to you to fix that, however you see fit.
Then the stronger kid comes along and takes the toy away, because he is stronger and now it's in his hand and he says "it's mine".
Would you find it coercive to forbid the stronger kid to act this way by means of a law (enforced maybe by the teacher) that forbids stronger kids to steal from smaller kids?
edit: oppressive -> coercive, sorry
they also tend to shit when and where they want (would you say that "it is a natural right" too?). The point of upbringing in civilized society is to put under control the "natural" instincts. And what you mentioned is an instinct, not a right. The notion of rights comes later as the rules that the people with developed "bladder control" agree upon in order to live together and cooperate.
Whether I read it or not is irrelevant. The fact remains that you opened your argument with a demonstrably false claim.
> And it IS factually correct in that there was state-maintained fiat currency at the genesis of nearly every story
That may be, but that's not what you said, nor is it what I disputed.
> Consider how uninteresting this exchange is
I dunno, I think it's kind of fascinating the lengths some people will go to to avoid saying something as simple as, "You're right, I phrased that badly. What I meant to say was..."
I assume 'fair' to you would mean taking it from them to re-distribute between everyone else?
You can't do that if they don't sell and they won't sell untill bitcoin stores large portion of world's wealth.
> I assume 'fair' to you would mean taking it from them to re-distribute between everyone else?
I have no idea why would you assume that. Especially if you could achieve same thing just by destroying their bitcoin. No need to re-distribute. Share is the thing that matters not the amount.
On more serious note fair for me is more or less how actual brick and mortar econony distributes things. You make things other find useful, you get share of humanity's wealth in return.
Holding things, bitcoin, gold, real estate, copyright strays for me from 'fair'. I see it as the less fair, the less you contibuted to humanity to acquire those things and the more claim on share of humanity's wealth you have by holding them.
How do you think someone who's gold holdings are 1 kg in a warehouse embedded in motherboards is going to extract that to dump it on the market? Most gold by weight is effectively illiquid, while every Bitcoin is equally liquid.
As the source the article uses[1] discusses the breakdown of those 187,200 tons is:
* Jewellery: 89,200 tonnes, 47.6%
* Private investment: 40,000 tonnes, 21.4%
* Official sector: 31,500 tonnes, 16.8%
* Other: 26,500 tonnes, 14.2%
* Below ground stocks: 57,000 tonnes
So around 50% of the number you're quoting is gold still in the ground. To repeat your snarky remark: Did you read the article?
I guess counting the official sector and private investment the top 10 official holders "only" have around 30% of the liquid market, which is way more distorted than Bitcoin, and very comparable in this context of a few owners of large liquid assets being able to distort the market.
1. https://www.gold.org/about-gold/gold-supply/gold-mining/how-...
We're talking about the entire BTC ecosystem. You can't compare that to a 16% sliver of the entire gold market because that fits your argument better.
> Most gold by weight is effectively illiquid, while every Bitcoin is equally liquid.
Which was basically my point, is that BTC-to-gold is an apples-to-airliners comparison and is at best a strained analogy.
Also you omitted the direct quote "Total above ground stocks: 187,200 tonnes" from the site you posted. So no that does not include gold that has not been mined.
Also, don’t know what “our system” or “your chaos” refers to, but if it’s the setup for another screed about how universal healthcare is superior to the current US system, save the wear and tear on your keyboard. I’ve heard it many times and I agree.
Some libertarians may be more pragmatic than others. For example, some may argue that so long as a government issued fiat currency is in use (as it is today), manipulations by the government should be held to a minimum. This may be the cause of the confusion.
Isn't this going to create a run on the currency? So say tomorrow some news comes out proving these btc whales are responsible for 80% of the order book and are manipulating the market, isn't it the slowest people to react who are stuck holding the bag?
Furthermore, isn't the problem with btc that we don't know if it's being manipulated or not? Manipulation or not at least I know what's going on with the dollar.
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.
Edit to further elucidate: It isn't exactly the loan that creates money, but what happens with the money after the loan. It will almost certainly land in a bank account somewhere, adding to that bank's reserves, which allows them to lend 90% of the loan's value again. (assuming a 10% capital reserve requirement)
It's perhaps better put like this:
You store a dollar in the bank. The bank makes a loan to a business to buy cars. The car company stores that dollar in another bank. The bank makes a loan with that dollar to a farmer to buy sheep from another farmer. That farmer who sold the sheep puts that dollar in the bank.
That one dollar was used in three different transactions, thus creating more US Dollars than were actually printed.
And on and on it goes.
Edited to add:
That's why runs on banks are so dangerous, because the bank never has the full amount of money in it's safe. It's using that money to make loans.
They do sell though, billions of dollars worth, everyday on several exchanges.
> Especially if you could achieve same thing just by destroying their bitcoin.
So now we're responding with force to a completely voluntary system? Great. And by the way, that is still redistribution, all other assets would go up in value in response.
> On more serious note fair for me is more or less how actual brick and mortar econony distributes things. You make things other find useful, you get share of humanity's wealth in return.
> Holding things, bitcoin, gold, real estate, copyright strays for me from 'fair'. I see it as the less fair, the less you contibuted to humanity to acquire those things and the more claim on share of humanity's wealth you have by holding them.
I agree on copyright, because it's a far different beast with tons of problems, but the others are essentially stores of value that you can get in a voluntary exchange by doing things others find useful.
There is inherited wealth, yes, but I've never found a way that works that solves that birth inequality.
Personally I find it telling that it is almost impossible to find people holding your positions in places where people have experienced these socialized systems unless they have the money to pay far more for care that is out of reach of most people.
Really? Then I think you've misunderstood my positions and you might want to try another read through my original comment. Unless you think that every other developed country in the world is clamoring for the exact NHS system? Because my point is that I'd prefer single payer or a robust public option to nationalized systems, not that I want the current US system.
note that you're referring to PPP adjusted numbers
Yes, because that's what makes sense. Why wouldn't you use PPP-adjusted numbers?
the gap between the UK and e.g. the US still illustrates the most important point
As I suspected, you're just defending the UK system as being superior to the US system. On this we agree, but it's irrelevant to my broader point.
Side note: why are Europeans so freaking defensive about their systems of governance? I swear that you can't have a reasonable discussion online about healthcare, taxes, employment law, etc, etc. without a mob of people from Europe jumping in to assure everyone that their system is the best and the US system for everything is horrible and we all unknowingly live in a terrifying dystopia.
We get it, you love the way you do things. I tend to agree on a number of issues, but I'm so tired of the condescending chatter about it. It just comes off as really insecure.
I've lived in Europe, I'd do it again, I LOVE Europe, but I don't think you've got it all figured out, or that your systems will always work everywhere.
What are you trying so hard to prove?
In that case the NHS is a lot less nationalized than you might think: a huge proportion of NHS services are provided by private firms under NHS contracts.
> Really? Then I think you've misunderstood my positions and you might want to try another read through my original comment. Unless you think that every other developed country in the world is clamoring for the exact NHS system? Because my point is that I'd prefer single payer or a robust public option to nationalized systems, not that I want the current US system.
The vast majority of developed countries have systems very similar to the UK, with a mix of public and private service provisions. The exact mix of public and private varies, but then again even in the US about half all healthcare expenditure is through the government.
> As I suspected, you're just defending the UK system as being superior to the US system. On this we agree, but it's irrelevant to my broader point.
That wasn't anything to "suspect" - it was there in plain sight. But that was also just as an example. Pretty much every developed country have socialized healthcare that is both cheaper and providing proper care for a large proportion of the population than the US system.
> Side note: why are Europeans so freaking defensive about their systems of governance?
Because the prospect of "US conditions" is terrifying, to the point that "US conditions" is actually a term used in politics in some European countries used to scare voters with the thought of what happens if you let the right wing run rampant over public services.
>I swear that you can't have a reasonable discussion online about healthcare, taxes, employment law, etc, etc. without a mob of people from Europe jumping in to assure everyone that their system is the best and the US system for everything is horrible and we all unknowingly live in a terrifying dystopia.
Equally, you can't have such a discussion without a bunch of Americans trying to push the kind of deregulation that led to the festering mess that is the US healthcare system.
> What are you trying so hard to prove?
It's not that we're trying so hard to prove anything. It's that we find it offensive that you let people die on the streets to avoid applying known working solutions out of fear they're too left wing.
You don't need to pick the UK solution. Any solution from any of the wealthier developed countries is superior to the US system. And they span the range from almost totally socialized (Norway) to mostly private healthcare with a mix of private and public insurance (Germany, France for example).
What they all have in common is that they provide universal coverage and a regulatory system that put people first. Most of them are cheaper than the US. Most of them are
Sounds like garden variety ignorance.
Of course not, but government allows us to reach outside the system (in some cases) and set the rules for the system. Those rules can be used to help encourage more moral behavior and discourage less moral behavior.
>Those of us who believe they should not don't see a perfect and moral market on the other side
Okay but you can see how this language:
>If that common medium is being manipulated then the market will perceive that as damage and route around it.
does begin to imply a "perfect" market right? If something is manipulated then we just route around it. That phrasing seems to hide that the real cost in "routing around" a currency is that a lot of people lose all their money.
>we just would prefer to exchange problems of force and authority with problems of interpersonal relationships.
This wording seems to put force/authority and interpersonal relationships on opposite sides of the spectrum but that's obviously not true. Interpersonal relationships are one of the primary methods of using force and authority.
Perhaps a more accurate representation of your views is that you would like force and authority to be only transmitted person to person?
Another shot at it with a thought experiment. Everybody goes to the bank and borrows 10k every month. The bank never asks them back for the first five years. Result? Inflation, possibly hyperinflation. Same as if they would be printing money (and they'll won't get anything back when the five years are past.)
I liked the way conversation started, but this is pointless.
Of course, like all ideologies, they don't think of this as a system of accumulated power that exploits destitute workers and relies on dystopian bands of warlords to beat anyone who protests into submission, but as something like 'a pure state of freedom'.
Now take property, property is coercive because if you refuse to follow property law then the government enacts violence against you.
It's one to one.
"Upset" wasn't my word choice, I was just re-using what clark said to show the emptiness in using childhood feelings to determine what is and isn't a natural right. I don't actually believe our society should be governed by the feelings of children.
So rape and pillaging it is then.
In BTC I don't know who's creating it, what they believe about it and I have no way to affect their creation of it. Seems like the democratic governing system is more fair and transparent so where did I go wrong?
It would matter more than my (non-existent) vote in bitcoin would.
>It doesn't matter who is creating it as long as the supply is stable and predictable.
So to be clear, your problem isn't that the fed is centralized and btc is decentralized it's that btc is regular and the fed can be irregular?
What I care about as a consumer is being able to predict the value of my currency at future times. Bitcoin doesn't allow me to do this at all.
No, you can trust them to tell you how much they're creating. Important distinction.
> I can even vote for people whose dollar creation opinions line up with mine.
The people who run the FED aren't elected, so no, you can't.
> In BTC I don't know who's creating it, what they believe about it and I have no way to affect their creation of it.
It doesn't matter, the issuance is controlled by the protocol and you can know how much Bitcoin will be created on 2105/06/25 by making a few simple calculations.
So if you don't agree with it you can bail out right now and never participate in it, no one forces you to.
A on-chain bitcoin transaction allows an arbitrary number of off-chain transactions.
The existence of war does not absolve you. If your standard of morality is "everything that's better than war is okay", you have approximately no morality.
You don't have to use it though.
> So to be clear, your problem isn't that the fed is centralized and btc is decentralized it's that btc is regular and the fed can be irregular?
Both aspects are problematic. It's not only the FED that is centralized, the banking system itself is. Bitcoin is Peer-to-peer without trusted third parties.