Slashdot Mirror
Why Charles Stross Wants Bitcoin To Die In a Fire
Hugh Pickens DOT Com writes "SF writer Charles Stross writes on his blog that like all currency systems, Bitcoin comes with an implicit political agenda attached and although our current global system is pretty crap, Bitcoin is worse. For starters, BtC is inherently deflationary. There is an upper limit on the number of bitcoins that can ever be created so the cost of generating new Bitcoins rises over time, and the value of Bitcoins rise relative to the available goods and services in the market. Libertarians love it because it pushes the same buttons as their gold fetish and it doesn't look like a "Fiat currency". You can visualize it as some kind of scarce precious data resource, sort of a digital equivalent of gold. However there are a number of huge down-sides to Bitcoin says Stross: Mining BtC has a carbon footprint from hell as they get more computationally expensive to generate, electricity consumption soars; Bitcoin mining software is now being distributed as malware because using someone else's computer to mine BitCoins is easier than buying a farm of your own mining hardware; Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination and drugs and child pornography; and finally Bitcoin is inherently damaging to the fabric of civil society because it is pretty much designed for tax evasion. "BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions," concludes Stross. "The current banking industry and late-period capitalism may suck, but replacing it with Bitcoin would be like swapping out a hangnail for Fournier's gangrene.""
So, it has come to this.
You're a temporary arrangement of matter sliding towards oblivion in a cold, uncaring universe
Whether or not Charles Stross is correct is irrelevant; BitCoin is bigger than Jesus.
“Control the coinage and the courts -- let the rabble have the rest.” Thus the
Padishah Emperor advises you. And he tells you: "If you want profits, you must
rule." There is truth in these words, but I ask myself: "Who are the rabble and
who are the ruled?"
-Muad'Dib's Secret Message to the Landsraad from "Arrakis Awakening" by the
Princess Irulan
Don't use it then.
The link to Fourier's gangrene on Wikipedia is totally unnecessary, and the article includes an image that is decidedly not safe for work.
Captcha: unclean
Too bad you can't just have bitcoin killed like the last 4* out of 5 presidents who made any attempt at ending the fed.
*Andrew Jackson was just too stubborn and mean to die by being assassinated.
FUD.
edit: captcha is "attack". seems appropriate.
I don't like Bitcoin and I know many other Libertarians who feel the same way.
Because shitty /. articles keep being submitted about it.
.....you know they are a moron, know nothing about economics........and are probably an economist.
This article has been flying around for the past couple of days, and it's so riddled with misconceptions and pure falsehoods about Bitcoin that this guy should be laughed out of his job.
You know what has a carbon footprint from hell? The whole payments industry, and industry that could go away overnight if retailers, service industry, and wholesalers switched to digital currency.
Anti-malware software simply hasn't caught up yet, but sucking someone's power for pure financial profit sure is better than sucking someone's power to barrage others with email. Sure, there's still evil here, but Bitcoin itself is not the problem: there will always been viruses doing something.
Bitcoin's lack of regulation is not a Bitcoin deficiency, but rather a legal one. Blame government for treating Bitcoin as a commodity instead of as a currency, subject to the same laws as cash. Oh, wait, it basically is subject to the same laws as cash, except it's a whole lot easier to carry and the government can't create more of it out of thin air (which is a good thing, if you want your money to have the same or better purchasing power tomorrow as it did today).
At least he didn't give the argument "There isn't enough Bitcoin to go around." I'm sick and tired of defending that. There's 21 quadrillion units of Bitcoin (That's enough for 3000 satoshis per person on the planet), and it would be very easy to convince miners to further subdivide it.
This author reads like the worst kind of Keynesian: the kind that misleads and lies about alternatives, rather than attacking the principles and stability of the system itself.
Colin Dean Go a year without DRM
How lone before we substitute that silly block chain with work units from BOINC or Folding@home? Lack of inherit value in the currency was another complaint, wasn't it?
All rites reversed 2010
I liked the comment explaining where Internet Libertarians come from:
And if you grow up in your parent's basement, then you are shaped by an environment where the fundamental constraints on what you want to do are shaped neither by scarcity nor malignance, but _by genuine good intent_. Your relatives probably don't wan't you to spend all day smoking pot and playing video games; in some cases they will over-estimate just how much of a bad thing that is. And even if they _are_ right, it's not like anyone facing such hectoring is going to admit it.
Pretty much every libertarian position can be understood in that frame of restrictive but benevolent authority being the root of all 'real' problems. It's a rare parent who literally tortures their kids, so torture is, at best, not a 'real' issue, not a priority. But many make them do stuff for their health, so mandatory health insurance is a big deal. Pretty much no parents kill their child with drones, many read their diaries. And so on.
So to libertarians, Bitcoin is like wages from a fast food job as opposed to an allowance; lets you buy what you want without someone else having a veto. Only money that doesn't judge you can be considered entirely yours...
http://rocknerd.co.uk
"Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination (and drugs and child pornography)."
None these existed before?
Get up!
I thought the whole purpose of currency is as a store of value. It's not an effective store if the amount of that store's unit count can be varied at will the way it is with Federal Reserve money. And how is it different from the gold standard? Sure, mining gold gets harder as the supply runs out too.
There is an upper limit on the number of bitcoins that can ever be created so the cost of generating new Bitcoins [sic] rises over time, and the value of Bitcoins [sic] rise relative to the available goods and services in the market.
If I understand correctly, his persuasion is fundamentally incorrect. As bitcoins are infinitely divisible, the market can decide the value of increasingly smaller units (which is impractical with physical commodities, like gold) in response to scarcity brought on by that upper bound, loss of coins, higher mining costs, hoarding, and so on.
A Correct ! :)
Please remember the unspoken tenant of economics is its not WHAT the currency is based on, but WHO controls What the currency is based on. If nobody does than it is a good thing for the people. Ergo Bitcoin is indeed a very good things for the people.
Huge crabon footprint, hideous markets, damage central banking, hide transactions from government, tax evasion, ... I mean, if this has a case against Bitcoin, why doesn't he list some negatives about it?
Geeze! What a shitty essayist!
I think only idiots (and state banks) have a gold fetish.
Gold is valuable because people think it's valuable. It's not particularly rare (in the grand scheme of things) and it's not terribly useful as an engineering material other than it's nobility. It's value may not be fiat, but it is certainly founded on a global misconception that it is somehow special, which seems to have carried on unquestioned since antiquity when it arguably was. (i.e. can be found native and doesn't corrode)
Durr free market!
Some of the reasons he gives could be used to support the idea of banning cash because it is too anonymous.
BitCoin is bigger than Jesus.
How so? Google returns 124 million results for Jesus Christ and 40 million for Bitcoin.
It's also a commodity. There is nothing to stop someone else from starting their own currency, just as there was nothing to stop BtC from appearing out of nowhere its own line of "value" . As BtC get more expensive and mining get harder we can expect to see "me too" currencies whose "selling" point is to early adopters you can get in on the ground floor and whose "trading / accepting" point is, it hasn't hit its deflationary peak yet, so accept it, it will be worth more tomorrow than it is today.
What's good for the goose is good for the gander. This is the real fundamental flaw in all unregulated fiat currencies. Fiat currencies are worth something because , by law, there is a governed amount of money and no other competing monies which themselves are not also so governed.
With Bitcoin, not so much. The exodus to "other" Bitcoiny type currencies hasn't happened yet, but there's no reason to think it won't and ever reason to think it will.
Oh wait, I spoke too soon. Or not soon enough. Or something.
http://www.coindesk.com/litecoin-silver-bitcoins-gold/
Every time there are arguments made like this I remember something I read in the late 90s. It was a scholarly book by a broadcaster (I believe it was about HD TV) that had a section about why Internet video wasn't going to take off. It stated things like "postage stamp-sized video," jumpyness, bad audio... all those problems that were inherent in the early versions of Quicktime and MPEG.
The flaw in the argument comes in the unspoken assumption that what they are looking at is a final version. I personally don't think bitcoin will ever "replace" monetary systems across the world and there is a lot of reasons to hope that it doesn't, but a lot of these arguments make the assumption that no adjustments will ever be made and the ideas and tech. will never improve. And that just *doesn't* happen.
So the above poster doesn't even know Charles Stross is a writer - that's a pretty HUGE sign that they didn't read the thing that is being suggested as full of holes.
I agree with some points, but in general he seems to be only somewhat correct.
First of all, BitCoin is not anonymous. BitCoin is pseudonymous. Once mining dies out (which also solves a lot of his other qualms), you need to trade bitcoins some way. You have to exchange your real money to bitcoins. ALL transactions are public which means it's really easy to start profiling people. In the future it's probably easier to trace a person's bitcoin transactions than normal ones.
Looks like somebody didn't mine his coins...
I hate being a grammar nazi but, this Stross guy being a writer, I think it's warranted. Lack of mastery in his own craft makes me distrust his research a bit, even if it's a bit of an ad hominem on my part.
to damage states ability to collect tax and monitor their citizens financial transactions, as seen both in TFA and the Slashdot summary, lacks possessives and looks just plain bad.
> Bitcoin's utter lack of regulation permits really hideous markets to emerge, in
> commodities like assassination and drugs and child pornography;
Emerge? Yeah, lets ban Bitcoin before those markets turn up.
"For starters, BtC is inherently deflationary"
Yea that's a great thing about BtC, deflation is better than inflation. No more cheap shortcut for holding debt.
Lack of regulation can easily be fixed. The chain is public so government can always backtrack who made what purchase.
Naturally having to pay taxes and disabling the use for criminals will lower the value of a BtC, but it will also become more stable.
The carbon footprint of regular banks is much bigger, they have massive buildings, IT systems to process transactions, etc...
If the malware is not for BtC it's for something else, fact remains that users should keep an eye on their system and developers should make software more secure.
BtC gives the people freedom, where centralized banking gives control to big monolithic institutions that abuse it.
Just because I'm - apparently - a libertarian does not mean I'm wrong.
The people I know that harp on about bitcoin all the time think every last one of these is a plus side. Tax evasion? Taxes are robbery anyway. Assassination markets? Some people deserve to have bounties on their heads. Deflationary currency? That's exactly how you want your currency to be!
I find it very unlikely that this will dissuade anyone who thinks bitcoin is the bee's knees.
"BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks"
This is a GOOD thing, a very VERY good thing. Central banking is designed to only make a very very small number of people insanely wealthy and powerful. Only power hungry scumbags bent on world domination would be against this.
Do not look at laser with remaining good eye.
Bitcoin comes with an implicit political agenda attached
Whose?
Libertarians love it because it pushes the same buttons as their gold fetish and it doesn't look like a "Fiat currency".
One, any currency is a fiat currency. People have to agree to use it, be it beads, dollars, bitcoins or polished turds. Just because you have a problem with libertarian views (I do on some), does not mean an insulting argument is valid or appropriate
Mining BtC has a carbon footprint from hell as they get more computationally expensive to generate, electricity consumption soars;
Printing and minintg currency has a big carbon/environmental footprint as well.
Bitcoin mining software is now being distributed as malware because using someone else's computer to mine BitCoins is easier than buying a farm of your own mining hardware;
It is always easier to steal someones wallet than work for it. There will always be those that try to do just that. Your point?
Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination and drugs and child pornography;
This one really gets my goat. These markets (whether hideous or not), exist already, regardless of the currency. It doesn't matter if you by crack with blowjobs or acid with BTC, the market is there.
and finally Bitcoin is inherently damaging to the fabric of civil society because it is pretty much designed for tax evasion. "BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions," concludes Stross.
The blockchain is public. Once a wallet is tied to an individual, all its transactions are public, be they income that is untaxed or 'hideous market' purchases. Even years down the road, if a wallet I used to buy ecstasy in 2012 is tied to me in 2042, that purchase is now and forever tied to me (as well as all other transactions done with that wallet).
Silence is a state of mime.
Since libertarians are sort of getting to be the "new Jews" (i.e. a misunderstood community targeted on the basis of what their enemies say about them), here's a recap: 1. Libertarians favor peace over war. 2. Libertarians don't want to run other people's lives (or have their own lives run by other people) 3. Libertarians don't trust government because it is made up of individual people and don't understand why those who don't trust individuals trust government. Libertarian views on bitcoin are divided, much like views on everything else. Trying to say "bitcoin is a libertarian ideal," is the same as saying "war is a government ideal."
Well I want Charles Storss to die in fire!
Laws and tax levels should be things that are mostly agreeable to everyone. People mostly are decent unless they become to powerful. Most people want to pay their 'fair' share and follow the rules. Its when the rules become to onerous you get more misbehavior, which in turn begets more misbehavior as people get more used to flaunting the law.
On the other hand when you make governments ability to enforce so effective breaking the rules becomes impossible, you take away the incentive to keep the rules reasonable for all. It how you get abusive shit like the war one drugs.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
This story is so Tinfoil hat.
www.facebook.com/DareDefendOurRights
www.fairtax.org
"BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks"
I'm sorry... How is this supposed to make me not like bitcoin?
I, know, you hate videos but have a look and you might learn a thing or two about Bitcoin.
http://www.youtube.com/watch?v=Cs6F91dFYCs
ayottesoftware.com
For starters, BtC is inherently deflationary ... Less money chasing stuff; less cash for everybody to spend (as the supply of stuff out-grows the supply of money).
BtC maybe deflationary but so is the price of say PC components too. The real value of computers has declined exponentially since the 1970s yet the market is booming. Anyone knows that most PCs will sell a lot less next year than today yet people buy PC's. There's a great book called Less than Zero about this. I think bigger problems of deflation come around business cycles when wages don't adjust but deflation does not have to be the nightmare everyone is afraid of. In fact deflation is the whole purpose of economy, to get more stuff with less resources.
Mining BtC has a carbon footprint from hell (as they get more computationally expensive to generate, electricity consumption soars). This essay has some questionable numbers, but the underlying principle is sound.
Lack of deeper abstract thinking. Carbon footprints are moral masturbation because anything you produce has carbon footprint, either in fixed or marginal costs. By trying to regulate the end products, the author falls to economic calculation problem. As long as the externalities of pollution are paid by those who produce them it doesn't really matter for which purpose the carbon is produced. Saying one product is preferable to another is just politics. You can redistribute money for whatever things (research, medicine etc.), but that's beside the point.
There're valid points about problems but I think it's quite one-sided article. The reality has much more dimensions to this. I can see both good and bad sides of having an anarchist crypto-currency, just like piracy. On other hand it prevents the big institutions from rent-seeking (in piracy, making things cost more than their marginal and fixed costs and with crypto-currency excessive taxation), on the other hand it comes with all the problems anarchy comes with.
I have to agree with Stross, YAC is not going to help the bottlenecks currencies produce. As he alludes, all currencies take on a life of their own, mostly parasitical to the actual "economy" they're supposed to be "means-of-exchanging." What we need is what I'm calling "direct logistics" (DL) where supply and demand are directly connected a la a Leontief-like input-output matrix. The means no pricing vis-a-vis a currency, but simply the actual, direct supply and demand statistics. What you can "purchase" (more like procure) would be based on your "batting average," which the IO-matrix would figure out based on how well you're making the IO-matrix hum, which, in turn, would be dependent on how many "networks" you were involved in in a positive way. In the best DL world, resource usage would be rationed and, hence, a huge chunk of the IO-matrix would be devoted to getting more out of less, i.e., recycling and more-with-less consulting, since resource allotment would be merit-based. A further dream would be for all means of production to be "open source," i.e., anything and everything would be open for anyone to peruse and possibly improve . . . just like, theoretically, open-source code.
Once we reach the 21 million cap, bitcoin will have a nearly 0 carbon footprint. I don't see a problem with bitcoin deflation. Gold deflates too. So what? It's not like everyone is forgoing investment in the traditional economy in order to horde gold and bitcoin even though those options both currently exist.
the more popular alternatives like BitCoin become, because people will want to divorce themselves from the monetary system the Govt has in place, who wants to pay tax to a corrupted government that does things like arm criminals like mexican drug smugglers and islamic rebels that could potentially be terrorists, or bailing out banks when they gambled away other people's money on bad investments and the banks did it with the blessings of the Govt when they repealed the Glass-Steagall Act, and Barney Frank & Chris Dodd helped too with their bad financial policies, who wants to pay taxes to a bunch if corrupted incompetent criminals that try to pass themselves off as a legitimate government,
i hope i win the lottery because i would use the money to leave the USA quicker than you can say Jackie Robinson
Politics is Treachery, Religion is Brainwashing
BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mindâ"to damage states ability to collect tax and monitor their citizens financial transactions
He says that like it's a bad thing. Government monitoring it's citizens' financial transactions is the fast track to tyranny. Now that they're in the process of centralizing health care, how long will it be before people's transactions for alcohol, tobacco, fast food, etc., is tracked, and possibly declined because their health isn't good enough?
Taking guns away from the 99% gives the 1% 100% of the power.
Somebody call the Waaahmbulance. Some guy who hates libertarians and loves statism unsurprisingly also hates an option for trading value that states can't really control. Cry me a river. Oh well, luckily the whole system is fire and forget, decentralized and independent. Unstoppable no matter how much anybody stamps and whines.
I support the Slashcott and will not be reading or commenting from 2/10/14 to 2/17/14. Beta is steaming pile of dog shit
I like how he threw drugs in with assassination and child pornography. I'm sure the rest of his opinions are valid, though.
-- sudon't
Air-ride Equipped
But how much is the dollar an actual store of value? M2 seems to be on the order 1/8 the US's total asset value, and that doesn't even address the issue of the bulk of actual currency being held overseas, nor the more tangible data points of M1 or M0. You make me wonder how any FRB could really change the value of a dollar to any noticeable extent- certainly not undertaking actions that would show what was going on well in advance to anybody that pays attention.
Yes, it's a fiat currency, but it seems a hell of a lot more convenient to be able to transact worldwide than go "wait, let me use this perfectly good dollar to go buy some bitcoins, at which point I'll complete that transaction." Shoot, dollars are perfectly digital anyway- it's not like you take a wad of cash to some counter and ask for bitcoins.
..to put the genie back in the bottle. Stross is complaining about the Titanic's navigation system after it hit the iceberg. If the politurds from around the world had not trashed their own currency systems, bitcoin would have never taken root. If the fiat currency systems were sound and could garner the confidence of citizens, the value of BTC against them would not be rising. In a sense, Volker, Greenspan, Bernanke and their ilk are the force behind the creation of bitcoin. If BTC is taking us to hell on a rail, they are the ones who laid the track.
Technological progress has merely provided us with more efficient means for going backwards. -- Aldous Huxley
...worthwhile BitCoin post on /. , ever.
For those who don't feel like reading the article:
"Libertarians like it; therefore, I don't. I prefer our current form of crony 'capitalism', which employs the state to protect the assets of IP creators like myself while I can pontificate about the 'rich' (that is, people other than me) paying their 'fair share'." *
* WARNING: This article contains Appeal to Authority, which the Philosopher General has determined may be hazardous to your health.
Gamingmuseum.com: Give your 3D accelerator a rest.
Bitcoin is inherently structured as a pyramid scheme. Users who adopted it early had an easy time obtaining BTC, and they're incentivised to recruit others so their stockpile has value.
You forgot ductility. Combining this with its nobility and you have the best gilding material -- for spaceships as well as palaces.
Also, its conductivity. Though bested by silver & copper, these both tarnish.
I come here for the love
But it looks like he did math wrong. 3 million satoshis I thought would be the correct number.
Anyhow, the complaint is largely not about whether the math can work at such a basic level, it's that it's fixed limit and inability to recover 'lost' currency makes it deflationary assuming even the most rational set of participants and has no means of counteracting some pretty devastating ecoomic events that can happen in such a model. The poster just wanted to attack some point that he felt he could reasonably knock down rather than the valid points raised by the article.
The bank does a million more things than a bitcoin miner. Like mortgages. Small business loans. Your better analogy would be to tote up the carbon footprint of printing a dollar- or for that matter, a hundred-dollar bill. I'll take a wild guess similar to yours- the good ol sawbuck beats a bitcoin hands down.
And yeah, deflation is totally great for all of us. Just the other day I was thinking, wouldn't it have been wonderful if my student loan principal doubled _while_ I was being charged interest?
I don't understand the stigma against basement dwellers
They're efficiently using the space in the basement. There's no need for them to move out into another McMansion. I haven't heard of a basement dweller taking on home loans he couldn't afford and contributing to the housing bubble. Not going outside much also reduces their carbon footprint
Basement dweller/living with parents is actually a very logical course of action in today's economy. People and governments have been spending beyond their means. Somebody has to cut back. It might as well be people who enjoy doing it.
His point about lack of regulation allowing disgusting markets is valid. However, I suggest tolerance for this is partially the result of bad regulation creating disgusting markets of its own.
The inability to regulate is what drew me to bitcoin originally, its why I said "Aha! This is great" and what made me want to support it, even if it might be doomed to fail (I am not convinced one way or the other actually, which infuriates some people who have less btc than me who hang on every swing while I shrug it off.... making money was never why I was interested in btc)
Thing is, for all this talk of regulation being good, its also done absolutely terrible things. Terrible things, which drive people like myself to say "good, fuck the regulator scum". Their regulations created the gang problems in this country with their monumentally stupid drug war. Tally the body count on that boondoggle and then complain to me about assasination markets that have never verifiably produced a body.
All the while "regulation" has created the most perverse markets ever, driving safer drugs off the street, and making the worst abuses the most profitable.
Regulators can't be trusted and are typically blind to the destruction they leave in their wake. If bitcoin should die, I, for one, will support the next cryptocurrency that makes regulation hard or impossible. Its what the track record of regulators deserve.
"I opened my eyes, and everything went dark again"
This guy lives on a different planet than I do. Most of what he says is bad is good. And his fear mongering is way overblown. This is especially delicious: "to damage states (sic) ability to collect tax and monitor their citizens financial transactions" Yay!
This has the classic whiff of panic that seeps out of the establishment when they feel threatened. Again, Yay!
Mining BtC has a carbon footprint from hell
This is precisely why I refuse to use Bitcoin. Its requirement to perform energy-wasting computation is a serious design flaw.
Of course some mining work is necessary -- we need 3rd-party validation of signatures and transactions, and we need a financial incentive to perform those calculations. Unfortunately, Bitcoin also requires the mining process to perform useless calculations, which take the vast majority of the mining time.
This makes Bitcoin highly susceptible to irrelevance, once new digital currencies are developed that have a more elegant and efficient design.
We got into it to rape it for the money we could, no one expects to keep a "portfolio" of virtual currencies.
"If any question why we died, Tell them because our fathers lied."
It's got 1's! It's got 0's!
The real question is, what hasn't it got? I'll tell you. It doesn't have herpes. Now I'm not saying other digital currencies have herpes, I'm just saying the miners of those currencies haven't claimed that their hashtags are herpes free and they haven't bothered to deny that their hashtags are infected with herpes.
Just let me know what kind of hashtag you need. I've got Sha, Md5, and many more.
Just tell me. What is it you need?
(And I've got a bridge too!)
Whose main protagonist technically has no income, but lives well because other people pay his bills and provide him goods and services for free in exchange for his ideas. He also has an ex-wife who is an agent for the IRS, which claims he must have income - and therefore owes taxes on it - because he lives well, and are trying to collect. She goes through extraordinary lengths trying to get him to pay.
She...comes off as not a very nice person.
.
Prisencolinensinainciusol. Ol Rait!
It doesn't sound like such a bad thing after all.
Nothing "looks like it" about bitcoin, it was designed as a weapon against world financial system. Highest coal of bitcoins in to eventually supersede all worlds currencies(achieving such a goal is entirely different matter tho). That pretty much means rewriting world economy. Bitcoin is designed to take control out of governments hands, the entire system is self regulatory and designed to resist tampering from governments or anyone really.
“Let me issue and control a nation's money and I care not who writes the laws.” Mayer Amschel Rothschild (1744-1812), founder of the House of Rothschild.
I wonder, what if nobody really controls money?
Bitcoin doesn't get harder to generate so much as the pool of coins is shared between more parties...
As for the carbon footprint, new mining hardware is intentionally more efficient than the previous generation, and if the rewards from mining become smaller than the cost of electricity people will stop doing it.
Similarly as the dedicated hardware gets more advanced, mining on GPUs and especially CPUs becomes completely useless, so even with thousands of nodes you will never make any worthwhile amount. The returns from using malware to mine bitcoins must be pretty tiny today, even with huge numbers of infected systems.
And illegal goods/services have been provided for money long before bitcoin even existed, bitcoin just provides a new way to pay for them because of its perceived anonymity... In reality its probably still easier to trace than cash, and the existing methods for combatting such sales will still work too.
http://spamdecoy.net - free throwaway anonymous email - avoid spam!
There's a whole lot in the summary that is just wrong or out of date. First off, the energy consumption for bitcoin mining is becoming more and more efficient, especially this year thanks to the addition of ASIC circuits for the job. Also there are several alternative currencies that are trying to address this with alternatives, including Peercoin and Primecoin.
Next, the news of malware for mining Bitcoin is not new at all - it's been happening for well more than a year. And the defense is the same as always. Really this is an issue of malware, not an issue of Bitcoin. There is also malware out there to steal credit card numbers and bank account information - that's not a strike against credit cards or bank accounts.
Finally a lot of this is a matter of opinion. The author thinks a deflationary system would be terrible - many of us think it would be wonderful. This is actually addressed in the Bitcoin FAQ with a link to a real article on the theory so you can consider it and make up your mind rather than starting with a preconception off the bat. If you conclude that a deflationary currency is bad, don't use it - meanwhile let the rest of us use what we think would be best. If you like the cryptocoin concept but don't like deflationary currencies, there are altcoins that do not have a capped supply.
As for other points of the libertarian agenda - again, if you don't like it, don't use it. I support your right to pick the system you think would work best, and I think I should be allowed to do the same. "it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness"
Secession is the right of all sentient beings.
In a sense bitcoin is regulated by it's design in a way only a computer system can be. There are fewer rules that can be easily bent to political will because the design of the system enforces it's own rules; making it decentralized, like Gold. Gold being a physical item, it has been easier to control and regulate but don't let that make you think bitcoin is immune from lawyers. nothing is. It has little regulation so that appeals to the economic anarchists (libertards) but in reality, it's strongly rigid nature by design is a basic form of regulation that can not be tampered with, unlike anything that has ever existed before.
The reason many people like bitcoin isn't just a political agenda, it's a response to the corruption and power control over a monetary system has over people over the history of civilization. An attempt to take away the human element that eventually ruins all systems with concentrated power.
I read about bitcoin before it got going and I never did anything with it but observe. I'm surprised it made it this far without terrorism turning it into another Prohibition "war" but I'm still waiting for that expected outcome... unless it can get powerful enough influence before the banks declare it a threat, our masters will forbid it.
Democracy Now! - uncensored, anti-establishment news
Is it Stross or the submitter?
Bitcoin comes with an implicit political agenda attached
What he's really complaining about is that it's the wrong political agenda. If it were a political agenda Stross found more favourable, this wouldn't be a problem.
Let's face it: Bitcoin is a right-wing invention. That is the real reason why Stross hates it. Its aims and goals are explicitly right-wing (go reread Satoshi's paper for more). Now you know why the Slashkos-hentai-fapper-basement-dwelling-fedora-wearing-Ogabe-voter demographic is so affectedly blase about (if not outright hostile to) Bitcoin.
They like technology all right - but this technology espouses the exact wrong politics.
The only real currency in this world is power.
The more power you have, the more you can take away from others ("borrow"). The US dollar is only backed by power of the US government to coerce people and other nations, nothing else.
Bitcoin has no such backing. It is worthless.
It supposed to be a free currency.
Some people have a terror of freedom. Stross is apparently amongst them.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination and drugs and child pornography; and finally Bitcoin is inherently damaging to the fabric of civil society because it is pretty much designed for tax evasion.
[sarcasm]All perfect examples markets and activities that weren't there before the Bitcoin...[/sarcasm]
Privacy is terrorism.
The link to Fourier's gangrene on Wikipedia is totally unnecessary, and the article includes an image that is decidedly not safe for work.
I've actually seen (and smelled) a case of Fournier's Gangrene.
What you're looking at on Wikipedia is a little misleading, as it is actually the aftermath of a surgical procedure in which necrotic tissue has already been stripped away. The typical appearance of a case would involve something more like painful and massively swollen testicles, with discoloration that may initially be reddish but rapidly changing to bluish/greenish color, with a foul odor. Externally visible tissue breakdown will eventually start to happen, but most cases end up in surgery well before that happens.
of BitCoin
It does what is intended - provides a transferable store of value that is better for the user than any other currently available currency(other than the current volatility) .
The real fear of BC is that it will interfere with government's stealth tax via inflating the money supply. This will produce wrath from the ruling elite.
On the other hand its a means to get around the oppressive states of today that track currency, and with it, all transactions, and things arbitrarily prohibtied.
The drug market is not the problem, prohabition is.
No, bit coin is not perfect, and it also has some fundimental flaws like a limit on how many bitcoins can be mined, the ability to lose them, and it doesn't address larger social issues.
but it also has its advantages, like not having a major player than can shut you down for political purposes, like what happened with wikileaks.
if for no other reason than it is so excellent at pushing people's buttons, causing them to spew illogical and inane arguments that either have no special relevance to Bitcoin, are directly analogous to mainstream currency systems, or show their utter ignorance of the topic.
His only potentially valid point is easily fixable in the same way previous problems have been fixed:
*) BtC is inherently deflationary -- also my largest concern, but if it turns out to be a problem it can be fixed by a majority of miners agreeing to the change. We just need to keep an eye on it should a problem arise.
The rest of his points...
*) BtC is untraceable -- Only if it never touches the real world, which makes it almost useless. If it touches the real world anywhere, the transactions are traceable thru the blockchain. Just ask DPR. If you want untraceable, use U.S. dollars.
*) Mining has carbon footprint from hell -- Except it doesn't. You think transactions are free in any current system? Why do they cost so much then? Miners have to recover their cost, and mining is getting dramatically more power efficient every year.
*) Malware -- credit card and bank account numbers are stolen by malware. Why should any resource be any different? Even if every single networked personal computer and server on the planet were subverted to mine Bitcoin, the growth of FPGA and now ASIC mining makes malware mining insignificant.
*) BtC does not violate Gresham's law -- the claim depends entirely on the flawed malware premise. Making this claim is just idiotic. I can see the spittle blowing all over his keyboard and monitor...
*) Lack of regulation permits funding horrible things -- more spittle. This means bitcoin is just like the dollar. Except the dollar is heavily regulated and used for far more, plus used for far longer and regulation hasn't stopped it yet. What possible point could this line of reasoning ever have? How stupid do you have to be to try and make it? If not stupid, are you so despicable and haughty as to be trying to appeal to stupid people who will buy into this argument?
*) designed for tax evasion -- this is simply a repeat of the untraceable argument and no more valid than it was the first time.
*) gini coefficient -- My favorite comment from the linked BtC thread, "When bitcoin was one day old, 1 person owned 100%. I'd say the market seems to be evening things out. --2_Thumbs_Up" How is this a criticism of bitcoin when it applies even more to every other competing asset and currency in the world? And if you link government or gov't currencies solve this issue, notice that the FBI now has one of the largest stashes of BtC by simply taking it, just like gov'ts have always done with every asset. I suspect Stross finds more appeal in the anti-interest ("charging interest is financial violence") comments which rapidly took over the thread, which is odd because those are supposedly even more extremely libertarian.
*) linear extrapolations imply far worse -- ooh, scary! And if you think that is bad, try exponential extrapolations! Or simply look the same way at the existing world for a brief moment.
*) "editorialize briefly" that BtC was designed as a weapon -- the whole thing was an editorial, a rabid, foaming at the mouth editorial of nonsense.
I expected better of Charlie Stross. Oh well. Another apparently intelligent human shoots himself in the head while aiming for his foot, all because his head was up where it should not have been.
Why are these arguments based on Bitcoin replacing Fiat? Paypal did't wipe out the dollar, it just made something more efficient. It's like saying Bitcoin is going to replace Gold, Silver and any other means of which to exchange value. That's crazy, what's not crazy is Bitcoins usefulness and utility.
I lost interest in bitcoin roughly a minute after I read about it first, when I realized that the first people to build large mining rigs would be our new overlords. That's not better than all the land being owned by landed gentry for centuries.
"When I first heard Daydream Nation it quite frankly scared the living shit out of me." -- Matthew Stearns
"BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions,"
This is a rather bold two faced statement from a guy who has his protagonists doing exactly that. Did he forget he wrote "Accelerando"? WTF man!
Her fingers twitch, and his ears flush red; but she doesn't follow up the double entendre. "You don't feel any responsibility, do you? Not to your country, not to me. That's what this is about: None of your relationships count, all this nonsense about giving intellectual property away notwithstanding. You're actively harming people you know. That twelve mil isn't just some figure I pulled out of a hat, Manfred; they don't actually expect you to pay it. But it's almost exactly how much you'd owe in income tax if you'd only come home, start up a corporation, and be a self-made ?"
It all starts at 0
"Mining BtC has a carbon footprint from hell as they get more computationally expensive to generate, electricity consumption soars"
Electricity consumption may soar, but not all power sources are created equal. It is dishonest to pretend that an increase in electricity use must therefore reflect an increase in carbon emissions. Solar and wind suffer no such problems, and an increasing demand of electricity should warrant more and more use of clean energies. So please stop perpetuating this ridiculous conflation. If you want to complain about carbon, complain about carbon heavy power sources, not what is done with the power.
Just imagine, if we taxed something like economic rent instead of sales and salaries, it wouldn't even matter what currencies people were using.
Oh, but wait, that would mean that those with wealth and power might have to pay taxes just like everybody else. So never mind. Let's keep deriding bitcoin instead.
Read the "Neptune's Brood" - it's about as close to a treatise on interstellar economics as you can get in science fiction. He definitely knows what BTC is and he provides a rational critique of it. I happen to agree with him, btw.
This fixation many libertarians and conservatives have with gold is that something of real value underpins the currency. Fiat currencies are subject to far more dramatic swings based on intangibles like "consumer confidence" and "government stability" while being easily manipulated by politicians (like the current Fed, which under Obama is printing money like a mad man (and thereby stealing value out of every dollar in your wallet/bank account moment by moment without you noticing because the number printed on the paper does not change even though the purchasing power does)). The opposite of "funny money" with a value set by bankers and politicians is a money tied to an actual valuable asset (like gold) as American Dollars used to be before the recent decades of complete fiscal recklessness and indebtedness.
As for the slam that gold and Bitcoin rise over time because there's a limited supply..... this is, and has always been (for gold), a false attack by people who like their currencies to be easily manipulated. More gold is being extracted from the Earth every day, so a "gold standard" is not a constraint to any economy producing REAL value and REAL growth..... the political classes hate it because it limits their ability to manipulate the economy. If you own gold, you have value no matter what the politicians do. The reason gold has risen so dramatically over the past few years is simple..... it has not. Gold buys about the same amount of oil (for example) that it used to buy...... it just buys a lot more (cheaper because of the money printing) dollars. Gold has not gone "up" the dollar has just been going "down" and it will get dramatically worse when we eventually have to deal with all the phony money (money printed without the underlying economic activity justifying it) Obama's treasury has circulated.
This is one of the key points, in my opinion, that makes the economists wrong. The economists are dead-set reliant on their inflationary systems of currencies and have done their damnedest over the years to prevent deflation at all costs.
But here's the thing, what does deflation mean?
It means that the individual units of currency become worth more, rather than less. This scares the economist because the great economic trick is to buy low and sell high. But if money can become more valuable, they suddenly need to accept the fact that the economy is a little more complicated than they want to admit, and a little more difficult to abuse for their personal gain. Shut up economists, learn to do your job.
He's mad that his clan's global banking hegemony is getting a taste of its own medicine.
"sucking someone's power for pure financial profit sure is better than sucking someone's power to barrage others with email"
I would suggest that stealing someone else's power for either is wrong, there is no "better use" once you have done so.
"This author reads like the worst kind of Keynesian: the kind that misleads and lies about alternatives, rather than attacking the principles and stability of the system itself."
An argument that presumes that Keynesian economics is all bad with no reasons advanced, rather than attacking the principles and stability of the Keynseian system itself.
"the government can't create more of it out of thin air (which is a good thing, if you want your money to have the same or better purchasing power tomorrow as it did today)."
So how do the bitcoin owners whose investment tanked this week have more purchasing power today than a week ago?
to damage states ability to collect tax and monitor their citizens financial transactions
All the more reason to use it! Remind me again why the government needs to know what I, as a free, law-abiding citizen, do with my finances.
In the end they will lay their freedom at our feet and say to us, Make us your slaves, but feed us. - Fyodor Dostoyevsky
How about somebody remove the gore pic from the article summary? I browse slashdot at work, and I expect some minimum level of safety in the links.
All of the supposed negatives of bitcoin this guy mentioned are actually positives in my book, and the whole 'bitcoin as environmental disaster' is farcical when you compare it to any paper currency.
Ending tax evasion would be easy -- just tax nothing but land. I mean, good luck hiding that, right?
Space game using normal deck of cards: http://BattleCards.org
Yes, BitCoin has some similarities with gold, but I don't think that is the core reason people, including libertarians, are interested in it.
Libertarians (and most people for that matter) recognize the benefit of competitive provision of goods and services in the voluntary framework of property rights. Establishing a monopoly is a bad recipe for providing a quality service. Money and banking are not exempt from such considerations, and we see the effects of bank cartelization around central banks.
I'm not going to argue the various advantages or disadvantages of BitCoin (energy consumption), but I do recognize that there are trade-offs. That's the point when people get to choose which money they want to rely on. BitCoins offer advantages in return (peer to peer transactions).
Aside from that, I want to address two incorrect claims from the author:
1) money that doesn't inflate is bad (presumably compared to money from central banks):
Both economic theory and historical evidence debunk this claim. See George Selgin on the track record of the Fed on its self-declared goals (price stability, anti-cyclical effect, employment).
Also, see Mises/Hayek on the negative effects of monetary inflation and credit expansion, namely bubbles and accretion of power to the early recipients of money and the well-connected (Cantillon effect).
2) lack of regulation opens up shady transactions:
This is logically incorrect. It's not the lack of regulation, but the relative anonymity of BitCoin which opens up such possibilities. Cash and other commodities can be used to the same effect despite being regulated.
Again, different systems of currencies offer different trade-offs for people to choose, that is the beauty of experimentation and innovation.
These comments are mine; I do not speak for my employer.
As in topic.
Someone please explain how Bitcoins are deflationary if they are (as I understand it to be so, please correct me if I'm wrong) infinitely divisible?
You see? You see? Your stupid minds! Stupid! Stupid!
Author will be a very grumpy old man, as Bitcoin becomes so ubiquitous that he will have no choice but to end up using it himself. I bet the richer more prosperous planet we'll grow old on will be littered with grumpy old people that for some deeply held economic or political belief chose to hate Bitcoin and all it represents. Too bad for them. I for one will enjoy the future and die happily in a Bitcoin world.
and that's though I'm quite a fan and usually consider your writing quite insightful.
Its just evil
They want to tax you - they want to get a piece of whatever action is going on to be able to pay for all the stuff they do, which taken as a whole is at least theoretically to your benefit. Watching the flow of funds is a relatively easy way for them to get it.
That's the reason.
Whether it's right, wrong, fair or unfair is a pile of different issues. Blame governments, blame an idealogy, blame corporate tax evaders, blame "tax havens", blame money laundering, blame whoever - but that's how it's ended up at this point.
You are in a society where if you don't like it you can start to change it if you can be bothered to get off your arse and vote as the first step. Later steps are also possible without a chance of getting gunned down by secret police.
The original book called Utopia makes the point very clearly that any Utopian ideal is the last possible place you would want to raise your kids. A utopia requires perfect citizens and kids take time to become them. It's a warning and not an ideal.
So I suggest you learn at least that much before hassling others about their ignorance and telling them they have a lot of learning to do. It appears that you have not even started at the high school end of the subject. I haven't got much furthur, but you don't have to know much about a subject to see somebody getting things so badly wrong that they could fix it with three hours of reading.
My quad-core i7 CPU takes about an hour to verify the block chain. ENIAC ran at 50 kIPS, and my CPU runs at 82,300 MIPS, thus assuming ENIAC had the same word length and instruction set (it didn't) it would take 188 years. Accounting for word length and instruction set puts it in the thousands of years range.
IBM punch cards are 7 3/8 x 3 1/4 x 1/143 inches in size, and hold 120 bytes of data each. My copy of the block chain is 13.9 GB, so it would need 115.9 million punch cards. Assuming you can store the cards in boxes like we used to, that take up about 4 x 8 x 18 inches each when stacked on shelves, and hold 2,500 cards/box, we need 46,000 boxes. A room height set of deep shelves can hold 24 boxes vertically (8 feet), and we can fit 1.5 stacks of boxes per linear foot of shelving, thus we need 1288 linear feet of shelving. Including aisle space and shelves on both sides, we get a width of 5 feet x 644 feet of rows = 3,200 square feet of floor space, which needs to be built to the standards of library stacks, since it is effectively a solid mass of wood, just like densely packed books are.
This many punch cards would be the equivalent of 185,000 board-feet of lumber, sufficient to frame about 20 conventional houses.
Do you have skin in the game? If not, I resolutely ignore your opinion.
If so, my opinion is that you are wrong and you will lose $, I will make it.
That is what makes a market.
do what the big guys are doing?
You make it sound like that is a bad thing. Have not taxes created in the modern world a monstrous octopus with tentacles reaching into every facit of our lives, feeding ever more voraciously? And does not this theft benefit mostly an elite political circle (Progressives, with a Democrat and a Republican wing) even as they throw a few scraps to their supporters. Think ancient Rome and "Bread and Circuses". Only when we can evade all involuntary taxes will we have freedom.
" Bitcoin's utter lack of regulation permits really hideous markets to emerge, in commodities like assassination and drugs and child pornography;"
This is BS, since these markets are fully mature and they use American dollars.
Hint: Deflation and Inflation are two very different things; in particular, deflation is not the opposite of inflation
When someone writes something like this, he has a few sentences in which to convince me that he is not a moron. Charles Stross fails to do so.
Last time I looked at the numbers, a rational miner would require approximately $.80 per transaction to include a transaction, based on (if I remember correctly) a 25 BTC payout per block, $800 per BTC, 80ms increased latency per KB of transaction size (which supposedly is the measured increased latency for BitCoin as it stands), and 400 bytes per transaction (average from BitCoin with today's architecture.)
Increased BTC price increases this, decreased latency decreases this.