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.""
“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
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.
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.
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.
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.
Well, he's a sci-fi author, so he's probably spent a lot of time thinking about disruptive technology. He's a geek at heart, with a sysadmin and programming background, so his opinion probably isn't any worse than most of Slashdot's subscribers. On the economy? Well, none of us are probably very qualified to discuss it.
I would highly recommend his Laundry series, though.
I view with suspicion anyone who tries to use bogeyman arguments such as drugs and child porn as excuses to not adopt stuff.
0) Bitcoin transactions aren't magically anonymous.
1) HSBC laundered BILLIONS for the drug lords and got away by paying just 11.1% of their net profits. Other big banks did similar things and got similar weak "punishments". So I can safely say that bitcoin will never be as big a part of the drug problem as the US Government is.
And knowing /. It will be raised again in a few days.