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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.""
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/
I don't understand this at all. I've never heard of Charles Stross and after skimming the Wikipedia article about him I fail to see why his opinion on Bitcoin is relevant.
To me this seems like the articles where some psychology professor bitches about why engineers should program robots with morality without understanding jack shit about automation and the precautions taken to make sure that failure happens in a controlled fashion.
In what way is Charles Stross opinion about Bitcoin more relevant than any other dudebro that doesn't know anything about economy, cryptography or anything else that would be relevant in understanding Bitcoins?
Seems to me that he have just heard someone who also doesn't know anything talk about it and formed an opinion from that.
One of the most blatant examples of foolish political ideas by science fiction authors is Gene Roddenberry's idea that advanced civilizations would have no money.
I'm not so sure Gene was that far off the mark. If you think about it money is basically a bartering tool to assist with the distribution of scarce resources. If you reach a point where resources are no longer scarce (sometimes called a post-scarcity society) then what would be the point of money? You want a mansion, order it up! You want a rocket ship to fly to Mars? Submit the requisition and the machines build it out for you. Too crowded on Earth? Grab a new residence on the ring-world being built around Alpha Centauri. And on and on. The Culture series of novels by Iain Banks envisions such a society, and I have to say it makes a lot of sense.
The part where Roddenberry's idealism got ahead of reason was in thinking it would happen that soon. I get the sense that we're still at least 1000+ years away from getting rid of money entirely. But if we don't blow ourselves up and we keep on developing tech at the current breakneck pace, I would say we will definitely eventually reach a point where money is no longer a necessary concept.
The reason Stross' opinion might be worth paying attention to is his writing often revolves around economics, and people like Economics Nobellist Paul Krugman think he's solid on it: http://boingboing.net/2009/08/11/charlie-stross-and-p.html