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
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
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
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 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.
Indeed - that was my first reaction. How dare the price of things go down over time! If you care about the poor, you should make everything more expensive by giving (certain) people more free money to spend.
You can't make a pretty pair of earrings for your spouse out of bitcoins, though.
Occasionally living proof of the Ballmer peak.
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.
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.
They are currently divisible to 8 decimal places, but it shouldn't be that hard to tweak the client software to allow smaller transactions if needed.
That said, it's like a COBOL programmer from the 1970's worrying about a Y2K bug. We're still a long way from needing that kind of precision.
Before you had to go through the Assassination Guild and Child Molester's Union. They ensured a painless death and good working conditions for their workers, respectively(?). Now with Bitcoin, we're seeing millions of new hitmen flooding the market, driving prices down so that anyone can have someone killed. This "democratization of murder" appeals to the bitcoin crowd, but it is ultimately harmful for society. There's also been reports that people are starting to molest their own children to produce pornography and selling it for bitcoin instead of kidnapping them or buying them. Bitcoin is not only undermining the family, but it is forcing the Mafia to have to find new ways to find revenue.
Why does this argument get so much traction? I don't get it. It's a great argument against the USD as well if you want to take it seriously.
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."
So you are going to pay for a loaf of bread with your American eagle gold coin? Awfully expensive bread, because I'm not making change. A lot of libertarians are pretty dumb going nuts buying gold and silver, you are buying it at the highest inflated prices and IF the economy collapses it will drop in value like a stone. so your $1000 an ounce gold becomes worth about $5.00 an ounce as trading coins.
Worst investment in your life is gold and silver right now because it is overinflated.
Do not look at laser with remaining good eye.
An ex-software developer turned sci-fi/horror author.
I personally love his Laundry series (modern day Lovecraftian/spy horror stories) and haven't read too much of his other stuff.
You should really hand in your geek card if you haven't heard of him.
You're a temporary arrangement of matter sliding towards oblivion in a cold, uncaring universe
It's not a good thing. If bitcoin truly does threaten TPTB, they can and will squash it. Yes, I know there will also be criminals using it for Silk Road, money laundering, and tax evasion, but as a legitimate currency, it will be dead.
Slow down, cowboy! It has been 4 hours since you last posted. You must wait another few hours.
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
..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.
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
I don't like any kind of money, but I still value 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"
I have. It would suck. The rich can avoid debt and sit on their wealth while it accumulates. The poor however can watch as their mortgage increases with value alongside their wages rather than gradually getting smaller. Deflation encourages hoarding wealth and inflation encourages investment and wealth creation. Ideally you don't want a huge amount of either, but a small amount of deflation is certainly better for the economy than deflation.
The idea that someone who owns a £10 million property would hate deflation is nonsense. If he thought that cash would get a better return than property he could sell the asset and hold cash instead. Look at the median networth of an American. It's pretty much sweet FA so who cares if their savings are going to go uup by a couple of % a year when their debts will as well and they often have debts that outweigh savings. Deflation is no use to anyone who isn't able to accumulate, or hasn't already accumulated, money.
How dare the price of things go down over time!
There is a good reason that modern economists pretty consistently oppose deflation.
How would you react if your cash was going to be worth more a year from now? You'd probably avoid spending unnecessary cash on anything. You'd also be more reluctant to invest, because you know that if you get, say, less than a 2% return you'd do better holding cash. So what you're going to do with your cash is hoard it, as much as possible.
So far so good - you've encouraged saving, right? But there's a problem: Everyone else reached the same conclusions that you did and responded more or less the same way. In deflation-adjusted terms, that lowers corporate sales (because consumers are avoiding purchasing), it lowers sales to corporations (because their sales are down and they're also trying to hang onto cash), it dries up the job market (existing corporations won't hire under those conditions, and new businesses have a hard time starting because they can't get sales), banks demand much higher interest rates (because you have to now beat deflation), and slowly but surely the gears of the economy grind to a halt.
By contrast, with modest inflation, everyone is encouraged to do something with their money, so goods and services circulate more, so more work needs to get done, so more people are employed and doing more work when employed. And it's relatively easy to prevent inflation from adversely affecting you: Hold assets that aren't cash (securities, real estate, etc), and adjust the prices you demand for anything you sell (including your labor). And yes, those conditions are very different from hyperinflation, where nobody wants to have cash because it will be worthless by next week: You want cash to move, but not move so quickly that nobody can plan ahead, which gives you a target of 1-2% inflation, which is exactly what we have.
I am officially gone from
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.
Banks being discouraged from loaning is a good thing, as shown by the most recent financial crisis which had as its biggest intermediate cause excessive poor quality loans. Everybody was hurt, banks and people encouraged to take loans they couldn't afford, and the world in general as the side effects expanded.
Loans are profitable to banks without regard to either inflation or deflation. With deflation, they get back more dollars than they loaned out, and the dollars they get back are worth more. PROFIT!. (The increased risk is that in case of default, the asset translates to fewer dollars.) With inflation the situation is more difficult, to profit they're relying on being able to borrow (from savings accounts and the government) at a rate lower than that at which they lend.
What's best for banks is a stable currency. What's very bad is a volatile, unpredictable currency that makes planning impossible.
Contribute to civilization: ari.aynrand.org/donate
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
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.
The poor however can watch as their mortgage increases with value alongside their wages rather than gradually getting smaller.
The debt + interest, in BTC, will be numerically fixed. However your salary will be shrinking as the value of BTC increases. You will not be able to ever pay that debt, probably.
If you wonder why the salary has to shrink: the business has to buy resources (such as raw materials and your labor,) and to sell the product. As BTC deflates, the price of the product decreases - and so the cost of production has to decrease too.
This is psychologically painful to go to a yearly performance review where the only question is how much your salary will be cut, while nobody is going to cut your debts. This effect has to result in rejection of BTC as money - at least because you cannot accept a debt that increases in value faster than you repay it. The lender will also see not much advantage in lending you his BTC and taking risk if, for half the interest, he can just keep them and watch their value grow.
Deflation encourages hoarding wealth and inflation encourages investment and wealth creation.
What a load of shit.
With deflation, it's difficult to get people to spend money because the "something valuable" will be cheaper if they buy it later.
Like computers. No wonder they failed so epically.
Thought experiment:
Alice, Bob and Charlie constitute a complete economy, each have one T-dollar.
It is determined that there are not enough T-dollars for their growing economy, it is decided to increase the number of T-dollars by one.
What is the fair way to distribute this T-dollar?
Know how it happens currently?
The government gives that T-dollar to Charlie.
Every time.
You are not Charlie.
The US federal government is constitutionally restricted from anything that can't be interpreted as an income tax (so my VAT suggestion fails as well).
No it's not. The 16th amendment authorized an income tax, but it's not like the feds subsisted off donations before that. Besides, when was the last time the federal government was meaningfully constrained by the limitations supposedly imposed on it by the constitution?
Space game using normal deck of cards: http://BattleCards.org
The US federal government is constitutionally restricted from anything that can't be interpreted as an income tax (so my VAT suggestion fails as well). The US constitution is fairly short, but mentions twice that any taxes collected by the federal government must be given to the states (proportion to population). Income taxes are specifically exempted from that requirement by the 16th amendment, but it remains for any other tax.
Only direct taxes must be apportioned. Indirect taxes (things like tariffs, income tax, VAT) are allowed under Article I, Section 8, Clause 1. The Fuller court did cause some complexity when they ruled that some income tax (specifically that derived from property) was a direct tax (previous understanding was that it was indirect). The 16th Amendment specifically patches the issue created by the Pollock case.
He effected a bored affect.