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.
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 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.
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.
...worthwhile BitCoin post on /. , ever.
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.
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.
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). 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.